NGS’ NG/LNG SNAPSHOT – December 2020, VOLUME 1

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City Gas Distribution & Auto LPG

Unified tariff to raise input cost 5-6% but no huge impact on consumer: IGL

The unified tariff structure is part of the government’s strategy to have a single gas market and to increase the share of natural gas to 15 per cent of the energy basket from the current 6 per cent.

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The Petroleum and Natural Gas Regulatory Board’s (PNGRB) decision to go for a ‘unified’ tariff structure for pipelines is expected to increase input cost of Indraprastha Gas Ltd (IGL) by about 5-6 per cent. IGL managing director A K Jana has said the impact of unified tariff will be minimal and part of it will be passed on to consumers. The hike in retail price will, however, be marginal as the transportation tariff for national pipelines constitutes only one-eighth of the final consumer price. “In a few geographical areas, we will be having some impact, but that will be a very negligible amount. Definitely, it will lead to an increase in prices as input costs will be increasing, because our GAs are not in zone 1. The rise in input cost will be around 5-6 per cent,” Jana told Business Standard. At present, the tariff is charged based on the distance covered through the pipeline, longer the distance, higher the charges. However, with the new regulation, there will be two zones — zone 1 that is within 300-kilometre and another zone is beyond that range. The tariff for the second and third zones will be 100 per cent, while the tariff of zone 1 will be 40 per cent of that of the other zones. The roll-out of open market access in the sector has also come out with some protection for the existing players. On November 26, the PNGRB has released a final regulation for providing access to the third-party shippers on city gas distribution networks. “The regulations have kept most aspects of the access code unchanged, except clarifying further on CNG stations run by OMCs or their dealers/franchises. The PNGRB has clarified the existing CNG stations of franchise/dealers (including OMC’s CNG/LCNG stations) will not be considered as third-party shippers for the purpose of allowing access,” said Ankit Patel, vice-president and co-head, corporate ratings, ICRA. While any additional capacity expansion at existing stations will also not be considered as third-party, setting up of CNG compressor at a new liquid fuel pump will be considered as third-party. Major CGD players – Indraprastha Gas and Mahanagar Gas have more than 50 per cent of their CNG stations on OMC networks; thus, this regulation significantly lessens the risk of third-party competition and margin contraction for them. The risk of third-party marketing would continue to remain for large industrial PNG markets catered to by players like Gujarat Gas in Gujarat given the price-sensitive and large market as well the access to multiple gas sources in the vicinity. Nonetheless, the impact would be limited as only a maximum of 20 percent of the capacity can shift to third-party in a worst-case scenario,” he added.

https://www.business-standard.com/article/companies/unified-tariff-to-raise-input-cost-5-6-but-no-huge-impact-on-consumer-igl-120112900445_1.html

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Gas distribution shares soar as competition overhang lifts

The oil and gas regulator, Petroleum and Natural Gas Regulatory Board’s (PNGRB’s) gazette notification for city gas distribution (CGD) removes a major overhang on competition for CGD companies.

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The share price of Indraprastha Gas Ltd (IGL) and Mahanagar Gas Ltd (MGL), which have significant exposure to metro regions of NCR and Mumbai, closed 9.5 % and 13.7% higher, respectively, on Friday. Shares of Gujarat Gas, too, gained 4%. CGD firms had marketing exclusivity in key geographical areas, which was about to end. There was also the fear that competition from oil and marketing companies would eat into market share, especially as CGDs share fuel outlets with oil marketing companies (OMCs) in metros. PNGRB’s notification, however, has given concessions, protecting the existing CGD business of firms. The notification restricts existing OMCs co-located in CNG outlets from selling CNG under open access route, mitigating any negative impact on the existing earnings of CGD companies in the CNG segment. This is a major positive for CGD companies,” said analysts at Jefferies India Pvt. Ltd. MGL and IGL benefit more because of higher CNG exposure. The broker pointed out that in the absence of the notification, about 20% of existing CNG volumes were at risk.

Gujarat Gas seems well placed on the volume gains front. Its volume growth got a leg up from growing industrial demand in the Morbi cluster (Gujarat) that has already seen bans on certain other fuels. However, margins tend to be lower in this segment. MGL shares led the gains on Friday, also owing to relatively lower valuations. IGL is now trading at about 28 times FY22 earnings estimates, compared to MGL trading at 15.8 times.

https://www.livemint.com/market/mark-to-market/igl-mgl-stocks-soar-as-pngrb-notification-removes-major-overhang-on-competition-11606457466450.html

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Adani Gas to change name to Adani Total Gas

Adani Gas Ltd, the city gas distribution firm of billionaire Gautam Adani’s group, will change its name to Adani Total Gas to reflect French energy giant Total’s stake in the firm.

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Adani Gas has through a postal ballot sought shareholders’ nod to change the name as well as alter its memorandum and articles of association, according to the firm’s filing to stock exchanges. After the French giant buying stake, Adani Gas is now “a joint venture company of Adani Group and TOTAL Group, France with 37.40% stake by each promoter and remaining 25.20% with public shareholders,” it said. “In order to reflect the names of both promoter groups, it is proposed to change the name of the company from ‘Adani Gas Limited’ to ‘Adani Total Gas Limited’ to reflect the holding structure,” the filing said.The Board of the firm, which retails CNG to automobiles and piped natural gas to household kitchens and industries in 15 geographical areas, had on November 3 approved the name change. The company board is headed by Adani and has two nominees of Total – its India head Alexis Thelemaque and Jose-Ignacio Sanz Saiz. Adani’s nephew Pranav Adani is the other promoter director on the board from Adani’s side. Adani Gas said its present business objective includes carrying out the business of natural gas, liquefied natural gas, compressed natural gas (CNG) and other forms or natural gas, associated gaseous substance, etc. “The company proposes to carry on the business of biogas, biofuel, bio mass, liquid to compressed natural gas (LCNG), hydrogen compressed natural gas (HCNG), hydrogen, electric vehicle (EV), manufacturing of various equipments and provision of value-added services relating to city gas distribution (CGD) business, etc,” it said. For this, the Memorandum of Association of the company is being sought to be altered. The company has already set up city gas distribution networks in Ahmedabad and Vadodara in Gujarat, Faridabad in Haryana and Khurja in Uttar Pradesh. In addition, the development of Allahabad, Chandigarh, Ernakulam, Panipat, Daman, Dharwad, and Udhamsingh Nagar gas distribution is awarded to a consortium of Adani Gas Ltd and Indian Oil Corporation Ltd, according to the company website.

Source: Indian Oil & Gas/PTI

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30 lakh CNG vehicle owners in India losing out on benefits of lower gas prices

Despite gas prices falling significantly in the past few months, CNG distribution companies in India, which thus far have monopolistic control over their operating markets,

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have chosen not to pass on its benefits in entirety to the end consumer. For example, Mumbai-based Mahanagar Gas (MGL) reported operating profit margin of 40.28 percent in Q2 FY2021. In comparison, the margins were 28.83 percent during Q1 FY2021 and 32.4 percent during Q4 FY2020.  One of the major reasons for the sudden sequential spike in margins has been the declining input gas prices which did not get fully passed on at the retail level. The company has about 256 CNG stations at present. Likewise, Indraprastha Gas (IGL) which has around 555 CNG stations in and around Delhi, reported operating profit margins of 28.26 percent during Q2 FY2021 compared to 13.07 percent during Q1 FY2021 and 24.27 percent during Q4 FY2020. Gujarat Gas, which operates around 400 CNG stations, too saw a similar rise in its margins. The operating profit margin during Q2 FY2021 stood at 28.63 percent compared to 17.15 percent in Q1 FY2021 and 16 percent in Q4FY2020. Gas prices have hit rock bottom as the Government reduced the price of locally produced gas to $1.79 per MMBtu from $2.39 earlier. The revision which became effective beginning October 2020 is the third straight reduction in gas prices in India over the past one year and also the lowest in over a decade. The new price will be effective till March 31, 2021 and is in line with the fall in global gas indices over the reference period. The Government has also announced the ceiling on price for gas produced from deep water, ultra-deep water, high temperature and high-pressure fields at $4.06 per MMBtu for H2 FY2021 which is 27.6% lower than the price ceiling of $5.61 per MMBtu for H1 FY2021. Though the retail CNG prices did come down after the announcement, but it has been miniscule in comparison to the drop in input costs. India has about 2,290 CNG stations as on August 1, 2020 and total CNG consumption in FY2020 was 3.247 MMT. The country currently has around 30 lakh CNG vehicles, data available with the government reveals. The Petroleum & Natural Gas Regulatory Board (PNGRB) has issued a draft regulation in line with the Government’s efforts of making India a gas-based economy. Though the likes of MGL and IGL are continuing to oppose the move by PNGRB, the competition once allowed may force the incumbents to be more price conscious in future. 

https://www.autocarpro.in/news-national/30-lakh-cng-vehicle-owners-in-india-losing-out-on-benefits-of-lower-gas-prices-77777

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Urbanites move on to PNG, but Cantonment still stuck with LPG

While the PNG Regulatory Board gave the task of laying PNG underground pipeline at Ahmedabad Cantonment to a private player in 2013, a letter by Ministry of Defence in 2017

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insisted on a govt agency laying the pipeline. Nearly 20,000 Cantonment residents are stuck with LPG cylinders due to this conflict. Ahmedabad may boast of an elaborate network of piped natural gas supplied directly to homes, thus eliminating the tedious process of ordering bottled gas, but a sizable number of people including defense personnel residing at Ahmedabad Cantonment have been denied the benefits. Sumer Rajput, an elected member of the Ahmedabad Cantonment Board, said, “The Ministry of Defence in a letter dated March 1, 2017, to heads of three services Army, Navy and Air Force has fixed the annual licence fee for laying of underground pipelines @Rs 1 per running meter. However, the Petroleum and Natural Gas Regulatory Board had on November 28, 2013, given the task of laying PNG underground pipelines at Ahmedabad Cantonment to a private player. There is a conflict here. While the MoD insisted on a government agency laying the pipelines, the Regulatory Board has allotted the same to a private agency. This has led to a dilemma and people residing at the Ahmedabad Cantonment Board are the sufferers.” The MoD has sought clarification from Principal Directorate Defence Estate on considering allowing private parties to lay the PNG pipelines and expedite the same, Rajput informed Mirror. According to a Cantonment official, “This is a problem faced by about 20 cantonment boards across India including Pune, Hyderabad and Telangana. The problem needs to be sorted as piped gas is 25-27 per cent cheaper than bottled gas. The government agency Gujarat Gas is in Gandhinagar. The MoD must quickly decide on the rates for the private agency that has already been allotted the area in an auction bid and ensure that it reaches the people.”

https://ahmedabadmirror.indiatimes.com/ahmedabad/cover-story/urbanites-move-on-to-png-but-cantonment-still-stuck-with-lpg/articleshow/79416562.cms[Edited]

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IGL may have to hike prices marginally after PNGRB directive

The bigger implication of the PNGRB directive is in the open axis front where the OMCs’ existing CNG outlets have been kept out of the purview of determining third party access,

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says Probal Sen, Senior VP-Research, Centrum Broking. hatis your analysis ofthe order that has come from PNGRB? There are two aspects to it one is of course on the unied tari and second more signicant one is on the open axis regulations. hat does it mean for some ofthese gas stocks? The unied tari means IGL probably has to increase tari marginally but please keep in mind that the transportation tari for national pipelines at the end of the day constitutes only about one-seventh or one-eighth of the nal consumer price for most customers for CGD. So even if it increases by 25%, 30% or 40%, whatever the nal number may be, as the individual tari notications come through for GAIL NSE -0.10 % and GSPL NSE 6.58 % , for the nal consumer from a CGD perspective, it is not going to be more than 3% to 4% based on extremely rough cut calculations that one can see. The bigger implication is the open axis front where the OMCs’ existing CNG outlets have been kept out of the purview of determining third party access. That has got a much bigger structural impact on their business because it at least protects the base and only brings into question that gas on gas competition would be there for whatever incremental growth is being targeted by the CGDs. It has implications from an investment standpoint as the incumbent CGDs will have to spend more aggressively to protect their market share against whatever third parties or even OMCs might be looking to grab. But at least it protects the existing base, which in itself was a big worry given that the draft regulations had not made any mention of leaving these out. From the transmission players’ perspective, for GAIL and GSPL, in the near term there would be a recalibration in terms of older pipelines versus the near pipelines but in the next ve years, it will have a positive impact because as volumes go up, it will improve overall realisations for the transmission companies. But for the CGD companies, there is not too much impact of the unied tari regulations. The open access rules are more important monitorables over the next two to three years

https://economictimes.indiatimes.com/markets/expert-view/igl-may-have-to-hike-prices-marginally-after-pngrb-directive/articleshow/79447759.cms

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GO TOP

Electric Mobility & Bio- Methane

Government is planning set up at least one electric vehicle charging kiosk at around 69 thousand Petrol Pumps across the country : Shri Gadkari

Shri Nitin Gadkari, Minister of Road Transport and Highways & MSME, today said that Government aims at creating core global competencies in India by facilitating seamless

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integration of the automotive industry with the world. Government is trying to create an ecosystem to accelerate the uptake of electric vehicles in the country. Addressing a virtual conference ‘9th Edition of Auto Serve 2020‘Electric Mobility Conference 2020-Seizing Opportunities in New Normal,  He elaborated a number of steps that Government has taken to promote electric vehicles which include reduction in GST to 5%, allowing delinking of battery cost of 2-3 – wheelers from vehicle cost as it accounts for nearly 30% of the cost etc. Battery charging ecosystem is very important, as such he said Government is planning set up  at least one electric vehicle charging kiosk at around 69 thousand Petrol Pumps across the country to induce people to go for electric mobility. Considering the huge potential of the sector Government has earmarked over Rs51000 crore for this sector under Production Linked Incentive(PLI), the highest amongst the 10 champion sectors. He also stated that there is a huge requirement of about 25 million skilled jobs in the automobile sector in near future. This very significant as this industry is going to create maximum jobs and growth, he added.

https://pib.gov.in/PressReleseDetail.aspx?PRID=1675114

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JBM Renewables inks pact with MoPNG to set up 500 biogas projects in India

JBM Renewables, a firm of JBM Group, on Monday (Nov 23) said it has inked a Memorandum of Understanding (MoU) with the Ministry of Petroleum and

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Natural Gas (MoPNG) for setting up 500 compressed biogas (CBG) projects across India. The MoU was signed in the presence of Petroleum Minister Dharmendra Pradhan, the company said in a statement. Speaking at the event, Pradhan said, “The country is likely to see investments worth Rs 2 trillion to set up 5,000 compressed biogas (CBG) units across the country. As part of the MoU, JBM Renewables will endeavour to establish and operate 500 CBG production projects pan India with a clear horizon.” JBM Renewables has been shortlisted and is among the four companies that have been identified by the government for the biogas programme. It will work jointly with MoPNG on the SATAT (Sustainable Alternative Towards Affordable Transportation) programme. The ministry will offer its guidance, support, and facilitation in conceptualizing, establishing and functioning of the plants, Pradhan said after signing the MoUs for setting up 900 CBG plants as part of SATAT initiative. The scheme envisages setting up 5,000 CBG plants by FY24 and the benefits from it will go to farmers, rural areas and tribals. The programme has been put under priority sector lending by the government which will provide it the right impetus and momentum. JBM Renewables will get into multiple strategic partnerships to cater to the specific requirements of different regions where these projects shall be commissioned. JBM Group aims to create the entire value chain strength-by-strength to come up with efficient and effective facilities, working towards environment conservation, the statement said. The Group has a diversified portfolio with presence in multiple domains such as automotive, engineering and design services, renewable energy, railways and original equipment manufacturing. It currently has an infrastructure of 40 manufacturing plants and 4 engineering and design centres across 18 locations globally.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/jbm-renewables-inks-pact-with-mopng-to-set-up-500-biogas-projects-in-india/79380726

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Rs 2 lakh crore investment in 5,000 compressed bio-gas plants in offing

India will see an investment of Rs 2 lakh crore in setting up 5,000 plants that will produce gas from bio and crop wastes by 2023-24, Oil Minister Dharmendra Pradhan said on Friday (Nov 20).

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To boost the availability of affordable and clean transport fuel, an agreement was signed for setting up 900 compressed bio-gas or CBG plants by companies such as Adani Gas and Torrent Gas. Under the Sustainable Alternative Towards Affordable Transportation (SATAT) initiative, the government is looking at setting up of 5,000 CBG plants by 2023-24 with a production target of 15 million tonnes, an official statement said. Speaking on the occasion, Pradhan said, “We have developed a clear-cut roadmap for SATAT. Letter of intent for 600 CBG plants have already been given and with today’s signing of MoUs for 900 plants, a total of 1500 CBG plants are at various stages of execution.” As much as Rs 30,000 crore investment is envisaged in these 900 plants, he said. “A total of 5000 CBG plants with an approximate investment of Rs 2 lakh crores are envisaged.” The gas produced at CBG plants can be used as fuel to power automobiles. Biofuels have the potential to reduce fuel import bill by Rs 1 lakh crore, he said without elaborating. Pradhan said SATAT provides for generating gas from municipal waste as well as forest and agri waste. Animal husbandry and marine wastes are also included. The policy provides for guaranteed offtake of the gas produced at the CBG plants by the state-owned firms. “SATAT will establish an ecosystem for the production of compressed bio gas from various waste and biomass sources in the country leading to multiple benefits such as reduction of natural gas import, reduction of greenhouse gas emission, reduction in burning of agriculture residues, remunerative income to farmers, employment generation and effective waste management,” the statement said.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/rs-2-lakh-crore-investment-in-5000-compressed-bio-gas-plants-in-offing/79325402

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Auto LPG sector demands level playing field as air pollution takes centrestage

Despite being one of the cleanest and most easily accessible alternative fuels, Auto LPG remains heavily under-utilised in India because of “almost penalising” policies towards clean

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fuels and lack of a positive messaging by the government, Indian Auto LPG Coalition said on Friday. As poor air quality takes centrestage in the capital again, the Auto LPG sector is urging the government to provide a level playing field in the interest of the environment, it said in a statement. Suyash Gupta, Director General of Indian Auto LPG Coalition, underscored the need to widen the policy focus beyond electric vehicles and give all available alternative fuels a level playing field in the market. Lack of positive messaging, absence of a prod to original equipment manufacturers (OEMs) for fuels like Auto LPG and prohibitive taxation on retro fitment kits as well as on Auto LPG are major challenges to its widespread adoption in India. “Firstly, the government must stop penalising people who use cleaner fuels like LPG and CNG which it currently does by imposing 28 per cent GST on retro fitment kits and 18 per cent GST on Auto LPG sale. Secondly, it must correct its messaging that lays excessive focus on EVs and encourage OEMs to bring out Auto LPG variants,” he said. While EVs may be futuristic, people of the country need more immediate term solutions for air quality. Notably, India consumes just 0.4 million tonnes of Autogas annually, which is just 10 per cent of South Korea‘s total annual auto LPG consumption. Indian Auto LPG Coalition (IAC) is the nodal body for the promotion of Auto LPG in India. Members of the Coalition include the oil sector PSUs, private auto LPG marketers, kit suppliers, and equipment manufacturers.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/auto-lpg-sector-demands-level-playing-field-as-air-pollution-takes-centrestage/79322287[Edited]

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UK’s EV push: India should take note and tie up with British partners

In a big move that could have a ripple effect for the green movement around the world, the UK has decided to ban the sale of new petrol and diesel cars by 2030 as part of a £12 billion green agenda.

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This includes £1.3 billion to put in place charging points for electric vehicles (EVs) in homes, streets and highways, and another £582 million in grants for those buying zero or ultra-low emission vehicles. Additionally, nearly £500 million will be spent in the next four years for the development and production of electric vehicle batteries. The UK’s plan is serious as it offers subsidies to incentivise the transition to EVs and invests in the infrastructure required. In that sense, Prime Minister Boris Johnson’s green agenda is in stark contrast to the Donald Trump administration in the US, which romanticised fossil fuels. Clearly there is a fundamental difference between Johnson and Trump in their approaches to science, notwithstanding their being clubbed together as populist leaders. The other country that is taking EVs seriously is China, basing this on its sheer dominance of the global electric batteries market. This ought to have spurred the US to join the EV race. Hopefully, the UK’s green push can now make up for the US dropping the ball. In India, the government in 2017 began by setting an ambitious target of 100% electric cars by 2030. But a pushback by industry and fears of job losses forced it to climb down. Without government investing in EV infrastructure upfront, passing the buck to industry won’t work. Nonetheless, EVs are the future and a concrete transition plan is needed. India should work with the UK and synergise EV development. The two sides can even jointly produce for the world market. Otherwise, China will soon come to dominate the global automobile industry.

https://timesofindia.indiatimes.com/blogs/toi-editorials/uks-ev-push-india-should-take-note-and-tie-up-with-british-partners/

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Bhupesh Baghel seeks Centre’s nod for biofuel production from Chhattisgarh’s paddy

Chief minister Bhupesh Baghel on Tuesday (Nov 17) met Union petroleum, natural gas and steel minister Dharmendra Pradhan in New Delhi and sought approval for

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production of bio-ethanol using surplus paddy purchased from the farmers of the state. Earlier, the centre had allowed state to produce biofuel using paddy from FCI (Food Corporation of India) quota. However, the state wants to utilise surplus rice produced in Chhattisgarh in view of its farmer’s welfare. Thus, Baghel had also written to the Centre regarding the proposal. He also demanded an increase in the quota of kerosene oil in the forest areas. During the meeting, Baghel said that nearly 80.38 lakh metric tons of paddy was procured in the Kharif marketing year 2018-19 in Chhattisgarh and 83.94 lakh metric tons of paddy in 2019-20, which resulted in surplus production of rice, thus exceeding the required quantity of rice for the central pool and the state pool under the public distribution system. The state was forced to take additional quantity of rice by milling surplus paddy. He informed the Union minister that the state government has made necessary provisions in Chhattisgarh’s Industrial policy 2019-24 for setting up ethanol plants. And has sought permission to produce biofuel from about 6 lakh metric tonnes of paddy grown in Chhattisgarh, in addition to the FCI quota. Baghel drew Pradhan’s attention towards the increased demand of kerosene oil in forest areas and requested him to raise its quota. Union minister directed the officials for immediate action. He gave assurances to fulfil the demands of Baghel with due consideration, said state government officials.

https://timesofindia.indiatimes.com/city/raipur/bhupesh-baghel-seeks-centres-nod-for-biofuel-production-from-chhattisgarhs-paddy/articleshow/79277974.cms

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We converted 5 tonnes of stubble into 1 tonne bio-CNG: Nitin Gadkari

Union Minister of Road Transport and Highways Nitin Gadkari said that Ecology and environment are very important for our survival. “Now in the areas surrounding Delhi,

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Punjab and Haryana, we have successfully converted five tonnes of parali (stubble) to get one tonne of bio-CNG,” he said. He was virtually addressing the gathering at ‘9th Edition of Auto Serve 2020’Electric Mobility Conference 2020-Seizing Opportunities in New Normal”. Stubble burning has emerged as one of the prime issue in regards to the air pollution in the national capital and its adjacent states.

https://economictimes.indiatimes.com/industry/energy/oil-gas/we-converted-5-tonnes-of-stubble-into-1-tonne-bio-cng-nitin-gadkari/videoshow/79380317.cms

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Okaya bags World Bank-funded contract from EESL for EV charging stations

Okaya Power Group firm OKAYA on Tuesday said it has bagged a World Bank-funded contract from state-run Energy Efficiency Services Limited (EESL) for the deployment

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of 1,020 EV (electric vehicle) charging stations across India. “OKAYA, a flagship company of Okaya Power Group, has bagged a major World Bank-funded contract from EESL,” a company statement said. EESL has given this contract to OKAYA for supply, installation and commissioning of 1,020 multi-standard EV charging stations with CCS, CHAdeMO & Bharat specification protocol across India. 

https://auto.economictimes.indiatimes.com/news/auto-components/okaya-bags-world-bank-funded-contract-from-eesl-for-ev-charging-stations/79400986

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Gas/ Pipelines/ Company News

Domestic natural gas output falls 8.6% in October

Indigenous natural gas production caters to about 51% of the country’s requirements, while around 85% of the country’s crude oil is imported. Domestic natural gas production fell 8.6% year-on-year (y-o-y) to 2,414 MMSCM in October.

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The 2.6 MMT of crude oil produced in the country during the month was also 6.3% lower than the production in the year-ago period. Indigenous natural gas production caters to about 51% of the country’s requirements, while around 85% of the country’s crude oil is imported. Domestic natural gas production fell 12.9% y-o-y to 13,939 MMSCM in the first half of the fiscal, as operations became increasingly unviable for energy production companies with government lowering selling prices. As noted earlier by Care Ratings, the gross production of domestic natural gas will fall 10.6% during FY21 as “no company would aggressively want to increase production or get into high-risk projects with such a low gas price”. The current price for gas produced from local fields has been revised to an all-time low of $1.79/MMBtu by the government, which is much below the breakeven point for most fields, the agency noted. Demand for the natural gas in the domestic market is largely dependent on the fertiliser (28%), power (23%), city gas distribution entities (16%), refineries (12%) and petrochemicals (8%) industries. The country aims to increase the share of natural gas in its energy mix to 15% by 2030 from the current level of about 6%. Domestic natural gas output fell 2.8% y-o-y to 31,168.4 MMSCM in FY20, reversing the growth trend recorded since FY18. Domestic production has been falling with the ageing of existing fields and muted response from the industry to take up new projects, mainly due to lack of adequate incentives. Other reasons for lower output in FY20, as admitted by the government to a parliamentary committee, include lack of buyers, inadequate evacuation infrastructure and other technical constraints in hostile geographical terrains.

https://www.financialexpress.com/industry/domestic-natural-gas-output-falls-8-6-in-october/2129662/

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Oil India makes gas discovery in Assam

Oil India Ltd, the nation’s second-largest state oil producer, on Friday (Nov 13) said it has made a natural gas discovery at a well drilled in Tinsukia, Assam. “The discovery will open up

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new areas for further oil and gas exploration in Assam and would help in enhancing the gas production with future appraisal and development activities,” the company said in a statement. Oil India Ltd (OIL) said well Dinjan-1 in Tinsukia petroleum mining lease (PML) in the upper Assam basin struck hydrocarbons. The well encountered about 10 meters of hydrocarbon-bearing sands, it said. On testing, it produced gas at the rate of 115,000 standard cubic meters per day. OIL, whose majority of operations are concentrated in the north-east, did not indicate the reserves the discovery may hold.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/oil-india-makes-gas-discovery-in-assam/79208288

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Finally, Gail completes Kochi-Mangalore pipeline

The much-delayed Kochi-Mangalore natural gas pipeline project is finally ready for commissioning any day from now as the national energy major Gail India has completed

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the final 540-metre treacherous stretch across the Chandragiri river in northern Kerala, according to a senior company official. The 444-km long natural gas pipeline was launched in 2009 at an estimated cost of Rs 2,915 crore and was to be commissioned in 2014. But opposition on safety and commercial grounds wherein the land price was the main hurdle, both from political parties and the public, ensured that the project lingered on. This led to the project cost nearly doubling to over Rs 5,750 crore. “We have completed the most difficult stretch across the Chandragiri river in Kasargod district in northern Kerala, on Saturday. Now the testing is on and this will be completed in the next two days. Within this week itself gas will reach Mangalore through the 444-km pipeline,” P Murugesan, the executive director and head of Southern region, Gail, told PTI over phone from Bengaluru on Monday (Nov 16). A formal commissioning will be done later, according to the availability of the minister, he added. The pipeline is charged up to Kannur now, and is live up to Kuttanand in Palakkad district, 90 km north of Kochi since June 2019 and of the remaining 354 km the line is ready up to Kannur. Kuttanad is the main junction of the project as from here the line bifurcates to Managalore and Bengaluru. The first phase of the project was commissioned in August 2013 in the Kochi metropolitan area with industrial supplies and domestic supplies from February 2016 by Adani Gas. Today the pipeline supplies 3.8 MMSCMD of gas every day to industrial and residential customers in Kochi and is set to cross 4 MMSCMD soon in the city itself, while Mangalore has a potential of 2.5 MMSCMD, Murugesan said. With the commissioning the pipeline, gas demand in the state will touch 80-90 million cubic metres per annum from 60 million cubic metres now. The pipeline is a big boost to the struggling Kochi LNT Terminal of Petronet which has a capacity of 5 million tonne annually but 90 per cent capacity has been idling due to the delay in completing the Kochi-Mangalore pipeline and Murugesan said with the commissioning the capacity utilisation of the LNG terminal will go up to 25-30 per cent. He also said the pipeline will supply has to all the seven districts it passes through in the state — Ernakulam, Thrissur, Palakkad, Malappuram, Kozhikode, Kannur and Kasargod — as well as the hilly Wayanad district. Of these already city gas distribution is on in Kochi where its supplies 3.8 MMSCM of gas every day.
https://energy.economictimes.indiatimes.com/news/oil-and-gas/finally-gail-completes-kochi-mangalore-pipeline/79254523

 

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Several EoIs received for BPCL sale, giants RIL, Aramco, BP not in race

The much-anticipated privatisation process of the Bharat Petroleum Corporation Ltd (BPCL) completed its first phase on Monday with several suitors submitting Expressions of Interest (EoIs).

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However, sources said that major energy giants including Reliance Industries, Saudi Aramco and UK’s BP have not placed bids for the state-run oil major. The transaction will move to the second stage after scrutiny by the transaction adviser, said a tweet from the Twitter handle of the Secretary of the Department of Investment and Public Asset Management (DIPAM). “For strategic disinvestment of BPCL, multiple expressions of interest have been received by the Transaction Advisor. The Transaction will move to the second stage after scrutiny by TA,” it said. Finance Minister Nirmala Sitharaman also said that the BPCL disinvestment process is making progress. “Strategic disinvestment of BPCL progresses: Now moves to the second stage after multiple expressions of interest have been received,” she said in a tweet. Sources said that 3-4 four bids have come in for the oil giant. RIL and Abu Dhabi National Oil Company (ADNOC) were anticipated to submit their bids. While RIL has not put in a bid as per sources, it could not be ascertained whether ADNOC has gone ahead with a bid. ADNOC already has footprint in India as it is the only overseas company that has crude stored in Indian caverns. The lack of interest among major players comes on the back of the poor oil demand globally amid the pandemic and low oil prices. The Centre has put its entre 52.98 per cent stake in the BPCL on the block. It proposes to disinvest its entire shareholding in the BPCL comprising 1,14,91,83,592 equity shares held through the Ministry of Petroleum and Natural Gas, which constitutes 52.98 per cent of BPCL’s equity share capital, along with the transfer of management control to the strategic buyer (except BPCL’s equity shareholding of 61.65 per cent in (NRL) and management control thereon). The shareholding of the BPCL in the NRL will be transferred to a Central Public Sector Enterprise operating in the oil and gas sector under the Ministry and accordingly, is not a part of the proposed transaction. The government’s stake in BPCL is worth around Rs 47,000 crore at BPCL’s current share price. “The progress on BPCL’s sale is positive for OMCs in terms of deepening deregulation and profitability outlook. Given the tight fiscal situation, disinvestment would be of utmost importance to the government this year,” the report said.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/several-eois-received-for-bpcl-sale-giants-ril-aramco-bp-not-in-race/79254580

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Market-friendly OALP driving self-reliance in energy sector: Pradhan

Petroleum and Natural Gas Minister Dharmendra Pradhan on Tuesday (Nov 17) said that Open Acreage Licensing Policy (OALP) is a market-friendly policy which is driving self-reliance in energy sector.

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Speaking at the signing of contracts for 11 oil and gas blocks offered under the OALP Bid Round-V, he noted that the successful roll-out of the HELP regime, followed by OALP Bid Rounds, has led to increase in exploration acreage in India. The exploration acreage which stood at about 80,000 square km. from earlier regimes now stands at approx 2,37,000 square km, post the award of blocks under OALP Round-V. Calling it a transformative policy, the minister said that the OALP has removed red-tapism and brought in a quantum jump in the Exploration & Production sector. Calling for moving away from business-as-usual approach and strive for exponential growth and speed, he asked the winners to bring in new technology and new business models, so as to expedite the production of oil and natural gas from these areas. The minister offered all support to the OLAP winners in carrying out their activities by facilitating the relevant approvals from the Central ministries and also the state governments. He said that the winners should farm out these areas so as to bring in international players into the exploration activities and run the business in a professional manner. Pradhan also suggested that an independent body should be set up for data gathering and data management so that all the bidders have access to the relevant information for making an informed investment decision. A total of 11 blocks in 8 sedimentary basins covering a total acreage of 19,789.04 square km has been awarded under OALP Bid Round 5, with Rs 465 crore of immediate exploration work commitment. The ONGC has been awarded 7 blocks where 4 blocks went to the Oil India Ltd (OIL).

https://energy.economictimes.indiatimes.com/news/oil-and-gas/market-friendly-oalp-driving-self-reliance-in-energy-sector-pradhan/79263273

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Vedanta Group puts in expression of interest to buy government stake in fuel retailer BPCL

Vedanta Resources said it submitted an expression of interest (EoI) for the government‘s stake in Bharat Petroleum Corp Ltd, making it one of three likely bidders, according to people with knowledge of the matter.

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The privatisation of India’s second largest oil refining and marketing company is key to the government’s disinvestment programme for the fiscal year. “Vedanta’s EoI for BPCL is to evaluate potential synergies with our existing oil and gas business,” a company spokesperson said Wednesday. “The EoI is at a preliminary stage and exploratory in nature.” Vedanta Resources chairman Anil Agarwal had said earlier this year that the group will evaluate bidding for BPCL since there were synergies that could be exploited. The identity of the other two bidders is not known. Most of the big oil companies including Reliance Industries Ltd, Russia’s Rosneft, Saudi Aramco and Abu Dhabi National Oil Corporation are said to have stayed away. The deadline for EoI submissions was Monday (Nov 16). Vedanta closed at Rs 108.85 on the BSE Wednesday, up 1.4%. BPCL ended 2.85% down at Rs 383.20. Bids for BPCL closed on November 16, after being extended four times due to the Covid-19 pandemic. The stake sale process will now move to the next stage–bids will be evaluated by transaction advisor Deloitte Touche Tohmatsu India LLP. BPCL’s stake sale will not include its 61.65% stake in Numaligarh Refinery in Assam, but will include its other refineries. The acquirer will have to make an open offer for another 26% stake from the public as per takeover rules.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/vedanta-group-puts-in-expression-of-interest-to-buy-government-stake-in-fuel-retailer-bpcl/79294562

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GAIL successfully pumps RLNG to city

The 438-km Kochi-Koottanad-Mangaluru pipeline is designed to transport 16 MMSCMD. GAIL India Ltd. on Sunday (Nov 22) pumped the first lot of regasified liquefied natural gas

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(RLNG) from Kochi to Mangaluru through the 438-km Kochi-Koottanad-Mangaluru pipeline thereby heralding the green initiative in the coastal region. Laying of the pipeline was completed last week after GAIL successfully laid the line under the Chandragiri riverbed in Kasargod district of neighbouring Kerala that had posed a great challenge. With hills on both the banks of the river with human habitation, GAIL had initially found it difficult to pass the pipeline crossing the Chandragiri. The line crossing the Netravathi at Arkula near Mangaluru was completed before the monsoon under challenging conditions. GAIL’s General Manager in Kochi Tony Mathew told The Hindu that RLNG was successfully pumped to Mangaluru on Sunday evening. RLNG would land at the receiving station of Mangalore Chemicals and Fertilizers Ltd. from Monday, he said. The company would pump 72,000 SCM of RLNG per day for the first five days and will escalate pumping to 6 lakh SCM, 8 lakh SCM and 1 Million SCM thereafter in a phased manner. Mangalore Chemicals and Fertilizers would utilise the LNG as stock feed to manufacture fertilizers, to fire its captive power plant and other requirements. The latest deadline to commission the new line was March this year; it, however, could not be achieved for various reasons, including the COVID-19 situation. The earlier deadline of September 2018 could not be achieved following difficulties in crossing the Chandragiri and the Netravathi riverbeds. The 111-km pipeline from North Kerala to Mangaluru was laid at an estimated cost of ₹ 160 crore. Kochi was already reaping the benefits of clean fuel with a majority of autorickshaws and taxis getting converted to use compressed natural gas as alternative fuel. However, city gas distribution in Mangaluru along with supply of CNG as auto fuel could take a little more time as supply pipelines have to be laid across the city. The Kochi-Koottanad-Mangaluru RLNG pipeline is designed to transport 16 million CUM per day with Kochi’s demand for 5 million CUM per day and 4 million CUM per day assured demand from industries in Mangaluru.

https://www.thehindu.com/news/cities/Mangalore/gail-successfully-pumps-rlng-to-city/article33156647.ece

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GAIL proposes Kondapalli-Tirupati natural gas pipeline

State-owned GAIL is planning a 450-km pipeline from Kondapalli, near Vijayawada, to Tirupati for supplying natural gas to industries and city gas distribution projects.

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Though the proposed infrastructure is for catering to consumers in Andhra Pradesh, the bi-directional pipeline, is expected to emerge as a crucial component of a larger natural gas pipeline network in the region, over time. Submitting an expression of interest for developing the pipeline to regulator PNGRB, the firm said the pipeline will originate from Kondapalli in KG Basin network in Andhra Pradesh and connect Amravathi, Narasaraopet, Podili and Tirupati. On natural gas sources for the pipeline, GAIL said ONGC had indicated additional HPHT gas availability at Odalrevu and Mallavaram in KG Basin. It counted the R Series gas from RIL field as well as other natural gas pipelines such as East West Pipeline, IOC’s Ennore-Bengaluru pipeline and RLNG terminal in Ennore, besides gas from other interconnected pipelines as sources. Pegging the potential gas demand en route at 4-5 MMSCMD, GAIL said the pipeline would have capacity of 4 MMSCMD. It has listed as potential customers industrial units, including those into steel, IFFCO-Kisan SEZ and a fertiliser plant proposed by a Kribhco joint venture in Nellore, an auto component firm in Tirupati; and CGD and PNG projects in Chittoor, Nellore, Prakasam, Guntur and Krishna Geographical Areas. Following the EOI submission, PNGRB has announced commencement of the public consultation process.

https://www.thehindu.com/business/Industry/gail-proposes-kondapalli-tirupati-natural-gas-pipeline/article33172086.ece

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Policy Matters/ Gas Pricing/Others

Downstream oil regulator PNGRB simplifies gas pipeline tariff

Oil regulator PNGRB has simplified the country’s gas pipeline tariff structure to make the fuel more affordable for distant users and to attract investment for building gas infrastructure.

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The Petroleum and Natural Gas Regulatory Board (PNGRB) has notified regulations for a ‘unified’ tariff structure for over a dozen pipelines that form the National Gas Grid which will lead to a 20-30 per cent rise in transportation charges paid by users near the source but a reduction for consumers in the hinterland. Currently, the tariff is levied in proportion to the distance transported – the longer the distance, the higher is the charge. This resulted in consumers away from the coast paying higher charges as compared to those near it. PNGRB has now notified a two-zone tariff structure – Zone-1 will be 300-km from the source of gas (gas field or LNG import terminal) and Zone-II will be beyond that. PNGRB said the tariff for the first tariff zone will be 40 per cent of the tariff for the second zone. This, industry sources said, will lead to an immediate increase in tariff for user industries such as power plants and fertilizer units in Gujarat, which is the landfall for ONGC’s offshore gas field as well as houses three gas import terminals. Consumers further away from the source, say in Uttar Pradesh or Bihar, will benefit as they will now pay a lesser tariff. “The tariff for zone-1 of Hazira-Vijaipur-Jagdishpur pipeline (India’s main truck line from Gujarat to Uttar Pradesh via Madhya Pradesh) will rise from Rs 20 per MMBtu to Rs 26 per MMBtu,” a source said. The increase will vary from pipeline to pipeline. The pipelines that will be part of the unified tariff plan include state-owned gas utility GAIL India Ltd-operated Hazira-Vijaipur-Jagdishpur (HVJ) and its supplementary Dahej-Vijaipur line and Dahej (in Gujarat) to Uran-Dabhol-Panvel (in Maharashtra) pipeline. Also, the line from Jagdishpur in Uttar Pradesh to Haldia in West Bengal, Bokaro in Jharkhand and Dhamra in Odisha (called the Pradhan Mantri Urja Ganga) and Dadri (Uttar Pradesh) to Bawana-Nalga and Dabhol-Bangalore pipeline would be part of it. Reliance Industries’ subsidiary operated Shahdol-Phulpur line from its CBM block in Madhya Pradesh to Uttar Pradesh as also its formerly owned East-East pipeline from Kakinada in Andhra Pradesh to Baruch in Gujarat would also be part of the plan. GSPL’s proposed Mehsana in Gujarat to Bhatinda in Punjab and onwards to Jammu/Srinagar as well as Mallavaram-Bhopal-Bhilwara-Vijaipur lines would also be part of it. Indian Oil Corp’s (IOC) Dadri-Panipat pipeline is also part of the unified structure. Sources said PNGRB will now notify unified tariffs for each of these pipelines. The new tariff structure would help create a single gas market in the country by attracting investment to complete the gas grid and make it more easily accessible. This is part of the government’s plan to raise the share of gas in India’s energy mix to 15 per cent by 2030 from the current level of about 6.3 per cent to cut its carbon footprint.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/downstream-oil-regulator-pngrb-simplifies-gas-pipeline-tariff/79438353

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India’s refinery throughput recovers in Sep, LNG imports rising: Ind-Ra

In a sign of increased economic activity, India Ratings and Research’s latest credit digest on country’s oil and gas sector has shown a recovery in refinery throughput during September.

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The ratings agency’s October 2020 credit digest edition highlighted an increase in LNG imports. India’s refining throughput increased 13.3% month on month to 4.33 million barrels per day in September 2020, while it declined 8.8% year on year.  “India’s petroleum product output, domestic consumption and exports declined 9.5% YoY to 18 MMT, 4.1 YoY to 15.5 MMT and 27.1% YoY to 4.8 MMT, respectively.” Besides, the production volumes of the ONGC, the OIL and fields under production-sharing contracts decreased 1.7% yoy, 5.4% yoy and 16.3% yoy, respectively, during September 2020. In September 2020, India’s crude import dependency almost remained stable on a yoy basis at 83.4%. In addition, LNG import volumes increased 8.9% YoY to 2,972 MMSCM in September 2020.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/indias-refinery-throughput-recovers-in-sep-lng-imports-rising-ind-ra/79228604

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India’s October crude oil imports mark biggest fall since July

India’s October crude oil imports posted their steepest fall since July and seventh consecutive monthly year-on-year decline as rising COVID-19 cases limited mobility

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and curbed consumption, government data showed on Monday (Nov 23). Crude oil imports into the world’s third-biggest oil importer and consumer fell 21.6% from a year earlier to 15.14 MMT, or 3.58 million barrels per day (bpd), data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed. “Due to the surging coronavirus cases, travel is still being avoided in the tier two and tier three cities and that along with muted air travel is weighing on oil demand in India,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India. “Also, when we come across such a huge fall (in imports), it generally points towards the fact that the existing demand is already being met by inventory from prior months.” The import of oil products also slumped 53% to 1.65 MMT in October. Meanwhile, exports of refined products fell 35.7% in October from a year ago to 3.84 MMT, and were down 20% from 4.80 MMT in September. Diesel shipments continued to hold a major share of the total exports but were down 24% on year to 2.37 MMT and fell 11.2% on a month-on-month basis. Exports of gasoline, or petrol, were down 19.8% to 797,000 MT versus a year ago. India has the second-highest number of infections in the world after the United States with 9.14 million. But looking ahead, factory activity is picking up and oil demand should rise in the next two to three months, Shah said. India’s factory activity in October expanded at its fastest pace in more than a decade.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/indias-october-crude-oil-imports-mark-biggest-fall-since-july/79380717

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Govt. move to ban 15-year-old diesel autorickshaws may affect over 700 drivers in Kozhikode city

The State government’s decision to ban diesel-powered autorickshaws older than 15 years is likely to affect over 700 drivers within Kozhikode city limits.

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The move, to be effective from January next, comes as a shocker for many who have been going through an acute financial crisis since the outbreak of COVID-19. Motor Vehicles Department (MVD) officials say the move is part of the Union and State governments’ policy to promote green energy and reduce pollution. To continue the service, such diesel vehicle owners will have to opt for new vehicles powered by electrical energy, liquefied petroleum gas (LPG), compressed natural gas (CNG) or liquefied natural gas (LNG). In Kozhikode, there are 4,337 autorickshaws with special permits for operating within the Corporation limits. The majority of these vehicles are diesel-powered and the new rule may affect many of them in the years to come. “Only very limited number of autorickshaws operate now, as the pandemic threat continues. No driver will be able to think of selling or disposing diesel vehicles to purchase electric or gas-powered ones,” says A.K. Sajeevkumar, a union leader in the city. According to him, there are about 250 drivers who operate LPG, CNG or LNG-powered autorickshaws in different parts of Kozhikode, but they are yet to get city service permit. “If the government is only focused on promoting electric-powered vehicles, people like us will again be in trouble,” he adds. The repayment of vehicle loans is pending for a majority of drivers. Union leaders say the new rule will gradually displace many poor drivers who fear taking loans again for purchasing new vehicles. Krishnakumar, an autorickshaw driver from Mavilikkadavu, says the steep fall in daily revenue will never prompt anyone to take such a risk. Meanwhile, road transport workers in the city are planning to launch a joint protest against the government move from November 17. Functionaries of the Kerala State Auto Taxi and Light Motor Workers’ Federation say they will stage a three-day satyagraha near the KSRTC bus stand. “What we seek is possible extension of the proposed rule or proper rehabilitation support for the affected section of drivers,” they add.

https://www.thehindu.com/news/cities/kozhikode/govt-move-to-ban-15-year-old-diesel-autorickshaws-may-affect-over-700-drivers-in-kozhikode-city/article33103858.ece

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M V Iyer assumes charge as Director (Business Development) at GAIL

M V Iyer on Wednesday assumed charge as director (business development) of state gas utility GAIL (India) Limited. Before this, he was working as executive director (projects) with the company,

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GAIL said in a statement. An electrical engineer, Iyer has 33 years of rich and diverse experience in GAIL in projects execution. “He has been part of the core team of GAIL for implementation of various long term and short term strategies in GAIL,” it said. Iyer is also director in one of GAIL’s new joint venture companies Indradhanush Gas Grid Limited (IGGL) for implementation of the North East Gas Grid. “He has been associated with several non-core business areas like commissioning of the Dabhol LNG terminal and implementation of 100 MW wind power project, 5 MW solar power projects and current thrust areas of city gas distribution (CGD) projects within short span of one year,” the statement added.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/m-v-iyer-assumes-charge-as-director-business-development-at-gail/79419564

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LNG Development and Shipping

Hoegh LNG signs deal with India’s H-Energy to supply FSRU from 2021

Norway’s Hoegh LNG Holdings, a provider of specialised vessels for importing liquefied natural gas (LNG), said on Thursday (Nov 19) it had entered a binding commitment to supply India’s H-Energy 

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with a floating storage and regasification unit (FSRU). This will be the first FSRU to start operations in India, which has six land-based LNG import terminals. Hoegh will supply the Indian natural gas company with the FSRU in Jaigarh, south of Mumbai in Maharashtra state, from as early as first quarter 2021, the company said. The final agreement will be for 10 years with annual termination options after the fifth year, Hoegh added in a statement. Hoegh said it will allocate one of its available FSRUs currently trading in the LNG carrier market for the project. “The construction of H-Energy’s LNG import project is near to completion, positioning it as a timely gateway to one of the world’s highest growing LNG markets,” said President and Chief Executive Officer Sveinung Stohle. The FSRU terminal, which has been delayed on several occasions, is planned to be capable of handing 4 MMTPA. H-Energy’s trading office in Dubai signed a sale and purchase agreement with Malaysia’s Petronas in 2018 for the delivery of LNG to the Jaigarh terminal.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/hoegh-lng-signs-deal-with-indias-h-energy-to-supply-fsru-from-2021/79301882

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Petronet LNG Q2 net profit falls 15.6% to Rs 9.19 billion on higher tax payouts

Petronet LNG reported 33.39% fall in Sep-20 quarter top line sales revenues yoy at Rs6,235.78cr. Petronet LNG is into the business of transporting liquefied natural gas or LNG and the

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yields are linked to the market price of crude and gases. While volumes were not really impacted by the pandemic, the price realizations did suffer in the latest quarter. For the Sep-20 quarter, the operating profits were up by 21.11% at Rs 11.6803 billion on the back of a 45% fall in input costs. The lower price yields were largely compensated by the lower inputs costs and the other miscellaneous expenses also trended lower. As a result, the operating margins or OPM expanded from 10.30% in Sep-19 quarter to 18.73% in the current Sep-20 quarter. Profit after tax (PAT) for the Sep-20 fell by 15.57% to Rs919.47cr on the back of higher impact of taxes compared to Sep-19 quarter. At a PBT level, the current year profits were 41% higher on a yoy basis but the company had a huge deferred tax credit in Sep-19, which resulted in this anomaly. However, these profits were still good on a smaller revenue base. Hence, the PAT margins improved from 11.63% in Sep-19 to 14.75% in the Sep-20 quarter.

Financial highlights for Sep-20 compared yoy and sequentially

Petronet LNG

Rs in Crore

Sep-20

Sep-19

YOY

Jun-20

QOQ

Revenues

6,235.78

9,361.18

-33.39%

4,883.57

27.69%

Operating Profit

1,168.03

964.45

21.11%

716.36

63.05%

Profit After Tax (PAT)

919.47

1,089.00

-15.57%

499.79

83.97%

Diluted EPS (Rs)

₹ 6.13

₹ 7.26

 

₹ 3.33

 

Operating Margins

18.73%

10.30%

 

14.67%

 

PAT Margins

14.75%

11.63%

 

10.23%

 

1 crore = 10 million

Key takeaways from the Sep-20 quarter results

  • There have been consistent demands for lower re-gasification tariffs for the Kochi terminal due to expected spike in capacity utilization. If the final price is lower, the company could have impairment and that is not factored into these numbers.

Source: INDIA INFOLINE/Indian Oil & Gas

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Gail India issues tender to buy and sell LNG for Jan-Feb: sources

Gail (India) has issued a tender seeking to buy a liquefied natural gas (LNG) cargo delivery into India and offering a cargo for loading from the United States,

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two industry sources said on Wednesday (Nov 18). It is seeking the cargo for January delivery into India and has offered a cargo for loading from the Cove Point plant in the United States in February, one of the sources said. The tender closes on Nov. 19, the source said.

The Indian importer has 20-year deals to buy 5.8 million tonnes a year of U.S. LNG, split between Dominion Energy’s Cove Point plant and Cheniere Energy’s Sabine Pass site in Louisiana.

Source: LNG Global/Reuters

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Gujarat State Petroleum seeks cargo for January delivery

India’s Gujarat State Petroleum Corp (GSPC) is seeking a liquefied natural gas (LNG) cargo for delivery in January, two industry sources said on Wednesday (Nov 18).

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It is seeking the cargo on a delivered basis for Jan. 5 to 9 delivery in a tender that closes on Nov. 20 and is valid until Nov. 21, one of them said.GSPC is seeking the cargo either on a fixed price basis or indexed to the Japan-Korea-Marker (JKM) pricing, the source added.

Source: Indian Oil & Gas/Reuters

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India aims to reduce diesel use with $1.35-billion LNG retail push

Indian companies will spend 100 billion rupees ($1.35 billion) over three years on 1,000 liquefied natural gas (LNG) stations along main roads and industrial corridors and

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in mining areas, the oil minister said on Thursday, to cut diesel consumption. Diesel, which accounts for about two-fifth of India’s refined fuels consumption, is widely used by buses, truck and in the mining sector. “Even if the LNG vehicle segment achieves 10% market share in a fleet of 10 million trucks, it will have a positive impact on reducing emissions and substituting crude,” Dharmendra Pradhan said at a foundation-laying ceremony for 50 LNG stations. Use of LNG in heavy vehicles will cut fuel costs by 40% compared with diesel and help contain inflation, he said, and urged automobile makers to look at producing LNG-compatible vehicles. LNG is suitable for long-haul trucks and buses as its higher energy density can help vehicles travel 700-900 km with one fill compared with about 300 km for a diesel vehicle, said V.K. Mishra, head of finance of Petronet LNG. Companies will set up LNG fuelling stations along a 6,000-km network of highways linking the four main metropolitan areas, he said, adding transport sector can utilise up to 25 million cubic meters a day equivalent LNG in the initial phase. Indian companies are spending billions of dollars to build gas infrastructure including pipelines and import terminals to raise share of gas in energy mix to 15% by 2030 from the current 6.2%. Use of LNG will also help India in meeting its commitment made under the Paris accord to cut greenhouse gas emission intensity of its gross domestic product by 33% to 35% below 2005 levels by 2030, he said.

Source: Reuters/LNG Global

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With GAIL pipeline in place, Petronet LNG eyes higher capacity utilisation in Kochi

With the natural gas pipeline of GAIL reaching Mangaluru, Petronet LNG Ltd is expecting a 30-40 per cent increase in capacity utilisation at its ₹4,700-crore terminal in Kochi in the next two-three months.

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“Right now, our capacity utilisation is 20 per cent (less than 1.5 million tonnes). And this will go up once more companies start using natural gas for their production requirements,” said Yogananda Reddy, Chief General Manager and Vice President, PLL Kochi Terminal. The terminal has a capacity of five million tonnes and the plant is ready to meet any demand from industrial consumers from the northern part of the State, he told BusinessLine. Once the city gas distribution (CGD) network expands to these regions, there would be more customers, he said. Mangalore Chemicals and Fertilisers, ONGC Mangalore Petrochemicals Ltd (OMPL), and MRPL are some of the major consumers who have shown interest in availing gas that would materialise soon after completion of all technical works in this regard, he added. Sources in BPCL, which engaged in the road movement of natural gas from Kochi, said that ISRO Thirunelveli, Turbo Engineering, Chennai, Inox Air Products, Bhurka Gas Bengaluru have started taking gas. However, the company is batting for a uniform VAT rate for LNG, as Kerala charges 14.5 per cent against 5 per cent in Tamil Nadu. MP Sukumaran Nair, Director of the Kochi-based Centre for Green Technology and Management, said that the Kerala Government should popularise the use of natural gas for industrial applications, and also encourage prospective investors to start new ventures using gas, envisioning a progressive gas utilisation plan for the State. The targeted CGD coverage is not progressing fast as the Indian Oil Adani Gas Pvt Ltd (IOAGPL) ― which bagged the CGD rights in 2015 ― could complete only a few gas stations and household connections in Ernakulam. The government should encourage the company to form local-level associate firms who could take up gas distribution for between 1,000-5,000 customers, he said. However, industry sources pointed out that IOAGPL is reported to be going ahead with its plans to create a green corridor from Ernakulam to Kasargodu by setting up CNG stations as part of the CGD network. In the first phase, 70 stations will be set up by March next year and another 100 in the next five years. According to Nair, the Centre proposes to transform the primary energy consumption in the country predominantly towards natural gas, and in the coming decade, natural gas will become a household fuel and also the primary energy source for the manufacturing sector.

https://www.hellenicshippingnews.com/with-gail-pipeline-in-place-petronet-lng-eyes-higher-capacity-utilisation-in-kochi/

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INTERNATIONAL NEWS

 

Natural Gas / Transnational Pipelines/ Others

EU, UN-led pact commits oil and gas firms to tackle methane emissions

Dozens of oil and gas companies on Monday committed to report more accurately on and, ultimately, reduce emissions of the potent greenhouse gas methane which is liable to leak

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from oilfields and pipelines. Oil majors such as BP, Royal Dutch Shell, Eni, Equinor and Total have signed up for the Oil and Gas Methane Partnership (OGMP) under the umbrella of the United Nations, the European Union and non-governmental organisation (NGO) the Environmental Defense Fund. Methane has over 80 times the heat trapping potential of carbon dioxide during its first 20 years in the atmosphere and recent analysis of satellite data suggests leaks from the oil and gas sector are much bigger than initially thought. The new standard aims to deliver a 45 per cent reduction in the industry’s methane emissions by 2025, and a 60-75 per cent reduction by 2030. While OGMP says its 62 members represent 30% of the world’s oil and gas production, U.S. oil and gas majors such as Chevron and Exxon are not involved. Nor are any Russian producers nor any national oil companies apart from the United Arab Emirates Adnoc. The OGMP comes on top of individual corporate pledges to reduce methane leaks, and the Oil and Gas Climate Initiative (OGCI) which is overseen by the firms themselves and includes U.S. majors and some national oil companies. It has also set a target of reducing methane intensity to 0.25% by 2025 across its members’ operations. The OGMP says it differs from other initiatives in that it requires members to report methane emissions at an asset level, rather than across the whole company, and in that it covers facilities in joint ventures, even if the operator of such sites has not subscribed to OGMP. It puts more pressure on oil and gas producers to actually measure methane leaks, rather than extrapolate from engineering calculations, and also covers a company’s whole supply chain – crucial for methane-heavy commodities like gas, which often travels hundreds of kilometres through complex infrastructure. The OGMP will publish a annual public report on companies’ performance against targets, said Manfredi Caltagirone, energy and climate manager at the UN environment programme. The EU, the world’s biggest gas import market which gets most of its gas from Russia, is currently revamping its own methane regulations.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/eu-un-led-pact-commits-oil-and-gas-firms-to-tackle-methane-emissions/79380668

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African consultancy says Russia has not delivered on oil and gas promises

Russian companies have so far failed to deliver on their promises to exploit Africa’s vast energy resources and the global pandemic should be used as

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an excuse for slowing their expansion, an energy consultancy said. Just over a year ago, Russia held its first African summit as President Vladimir Putin stepped up Moscow’s push for influence on the continent. “I think Russian companies have to do more to really get involved. Africans want to get married, Russians want just to date,” NJ Ayuk, the head of the African Energy Chamber, told an online conference this week. “There were lots of promises at this summit, there have been lots of memorandums of understanding (MOUs). But we are yet to see those MOUs being executed. GazpromRosneft , Bashneft and others had a chance to make a real impact … They have to do more.” Russia remains the top seller of arms to Africa. However, it has struggled to expand in other spheres of business and it is way behind China in terms of trading turnover in the region. During the Cold War, Moscow developed close ties with many African countries, backing for instance post-colonial independence movements. Many of those ties lapsed after the 1991 break up of the Soviet Union. Rosneft has a MOU with Mozambique, while Lukoil signed a MOU with the Nigerian National Petroleum Corporation at the summit. Gazprom declined to comment. Rosneft and Lukoil did not respond to requests for comment.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/african-consultancy-says-russia-has-not-delivered-on-oil-and-gas-promises/79210302

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Blast hits natural gas pipeline in Egypt’s North Sinai

blast hit the Al Arish-Al Qantara natural gas pipeline in Egypt‘s Sinai Peninsula on Thursday, witnesses and local authorities said.

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Witnesses said flames and thick plumes of smoke rose from the pipeline, describing the scene from vantage points in and around the city of al-Arish. Islamic State claimed responsibility for the blast on its Telegram channel without providing evidence. North Sinai local authorities said in a statement the fire had been extinguished and it had not affected gas supplies. The scale of the damage was not immediately clear.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/blast-hits-natural-gas-pipeline-in-egypts-north-sinai/79314181

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U.S. natural gas futures jumped 4% to a one-week high on Wednesday as liquefied natural gas (LNG) exports hit fresh records.

U.S. natural gas futures jumped 4% to a one-week high on Wednesday as liquefied natural gas (LNG) exports hit fresh records.

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The price increase came despite a continued rise in output, forecasts for milder weather next week and an expected smaller-than-usual weekly decline in stockpiles. The U.S. Energy Information Administration said utilities pulled 18 BCF of gas from storage during the warmer-than-normal week ended Nov. 20. That was in line with the 18-BCF decline analysts forecast in a Reuters poll, and compares with a decrease of 47 BCF during the same week last year and a five-year (2015-19) average withdrawal of 37 BCF.  On its last day as the front month, gas futures for December delivery rose 12.1 cents, or 4.4%, to settle at $2.896 per MMBtu, their highest close since Nov. 13 for a second day in a row. “This market was able to post one-week highs on what appeared to be pre-holiday short covering,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois. The U.S. Thanksgiving holiday is Thursday. The January contract, which will soon be the front month, gained 6 cents to $2.96 per MMBtu. Data provider Refinitiv said output in the Lower 48 U.S. states has averaged 90.3 BCFD so far in November, up from a five-month low of 87.4 BCFD in October. With the weather expected to cool, Refinitiv projected demand, including exports, would rise from 100.8 BCFD this week to 112.9 BCFD next week. The amount of gas flowing to U.S. LNG export plants was on track to hit a record high as Cheniere Energy’s Corpus Christi plant in Texas pulled in enough fuel to supply all three of its liquefaction trains.

https://auto.economictimes.indiatimes.com/news/oil-and-lubes/u-s-natgas-futures-rise-over-4-to-one-week-high-on-record-lng-exports/79430155

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Global LNG Development

Asian LNG spot prices rise on oil surge and heating demand

Asian spot prices for liquefied natural gas (LNG) rose this week (Nov 21-28), driven by a surge in oil prices and a potentially colder start to winter and higher heating demand.

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The average LNG price for January delivery into northeast Asia was estimated at around $7.40 per MMBtu, up $1.00 from the previous week, industry sources said. Brent oil futures, which the majority of Asian LNG contracts are priced against, rose 6% this week to the highest since March as traders were optimistic about oil demand recovering due to developments with various coronavirus vaccines. Temperatures in Beijing, Shanghai and Seoul are expected to be lower than average over the next two weeks, weather data from Refinitiv Eikon showed, increasing gas demand for heating. Analysts at consultancy Energy Aspects said heating demand started earlier than usual in northeast Asia this year. “The onset of early cold weather may have helped an early stockdraw and encouraged Chinese buyers to go back to the market for spot LNG purchases,” they said. “Adding to recent Chinese demand, two new 200 per thousand cubic metres (kcm) storage tanks at Shenergy and CNOOC’s Yangshan LNG terminal began operations last week, almost doubling the facility’s storage capacity to 895 kcm,” they added. The amount of gas flowing in the United States to LNG export plants was on track to hit a record high this week, with a good part of them expected to land in Asia. Cheniere Energy’s Corpus Christi plant in Texas has pulled in enough fuel to supply all three of its liquefaction trains. Loadings from the Bintulu plant in Malaysia continue to normalise after a brief disruption recently, traders said. Malaysian state-owned energy giant Petronas, the world’s fourth-biggest LNG exporter, said its Pengerang Integrated Complex (PIC) will be operational by early next year.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/asian-lng-spot-prices-rise-on-oil-surge-and-heating-demand/79463051

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Asian spot LNG price may have seen winter peak amid steady demand – Russell

The price of spot liquefied natural gas (LNG) in Asia may have already peaked for the winter demand season, with major buyers likely to have already purchased

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sufficient cargoes to meet their needs. While there is always the risk of an interruption to supply from unexpected plant stoppages, the market is indicating that the demand pull is likely over and supply remains plentiful. The weekly (Nov 13-20) spot price for Asia dropped to $6.40 per MMBtu in the seven days to Nov. 20, meaning it has slipped 14.7% since its high so far this year of $7.50 in the week to Oct. 30. It’s worth noting that the decline from $6.85 per MMBtu came as the assessment switched from cargoes for December delivery to those for January arrival. However, in a sign that the spot price can be swung by events, LNG futures in New York, which mirror the S&P Global Platts benchmark spot price for north Asia, ticked higher on Monday amid reports of supply outages. LNG futures ended at $6.55 per MMBtu on Monday, up 2.7% from the prior close. The increase came as Qatar, the world’s second-largest LNG exporter, was reported to have shut one of its production trains after a fault. However, an outage at the Bintalu LNG plant in Malaysia has been resolved, while Chevron has restarted a production train at its Gorgon plant in Australia, although the company intends taking another train offline for maintenance. Overall, the market appears well supplied, especially with the return of U.S. cargoes to Asian markets. U.S. LNG exports totalled 3.6 MMT on 51 vessels in October, the most since May’s 3.71 million, according to vessel-tracking and port data compiled by Refinitiv. November shipments are tracking around the same level as October, with 42 ships carrying 2.97 MMT departing up until Monday (Nov 23), a rate that if maintained would see about 3.87 MMT exported this month. The U.S. figures are substantially up from the 1.9 MMT recorded in July, around the time when many Asian countries were locking down their economies in efforts to combat the spread of the novel coronavirus pandemic.

China, the world’s second-biggest LNG importer, has also returned as a buyer of U.S. LNG, with 565,000 tonnes aboard eight vessels having discharged so far in November, or expected to arrive by the end of the month, making it the highest month so far this year. China’s total LNG imports in November are on track to be the highest since December 2019’s 7.14 MMT, with 7.1 MMT discharged, or awaiting discharge or en route to ports and expected to offload prior to month’s end. Japan, the world’s biggest LNG importer, may see an increase in November arrivals, with 6.73 MMT discharged or likely to be offloaded by month’s end, up from 5.81 MMT in October. South Korea, the third-biggest LNG buyer, is expecting November cargoes of 3.6 MMT, just short of the 3.85 MMT in October, which was the highest since February. The shipping data does seem to indicate that Asia’s three biggest buyers are increasing their demand for the winter season, but not massively so. If the spot price has peaked for the northern winter, it’s worth noting that it will be above the high of $6.80 per MMBtu for the winter of 2018-19, reached in mid-October of 2018. This suggests that the market is finding more of a balance, although the ongoing over supply means spot prices may weaken substantially outside of the peak winter and summer demand periods.

Source: LNG Global

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Global LNG-Asian spot prices slip on more supply from Malaysia, U.S.

Asian spot prices for liquefied natural gas (LNG) slipped this week (Nov 15-21) as supply from Malaysia returned after a brief hiccup, though traders

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were keeping an eye on potential demand during a colder-than-expected winter in Northeast Asia. The average LNG price for January delivery into Northeast Asia LNG-AS was estimated at about $6.40 per MMBtu, down 10 cents from the previous week, industry sources said. The price for cargoes delivered in December was estimated to be about $6.70 per MMBtu, down 10 cents to 20 cents from last week, they added. Temperature in Beijing and Seoul is expected to be lower than average over the next two weeks, weather data from Refinitiv Eikon showed. Loadings from the Bintulu plant in Malaysia are returning to normal after a brief disruption recently, traders said. This combined with record high exports of the super-chilled fuel from the United States were capping prices, they added. U.S. LNG shipments to China, for instance, are expected to hit a record high in November, shiptracking data from Refinitiv Eikon showed.

Several sell tenders were issued this week with Nigeria LNG offering 11 cargoes for loading in 2021, while Russia’s Novatek offered five cargoes for delivery into Europe next year, industry sources said. Indonesia’s PPT Energy offered 30 cargoes for loading from the Bontang plant over 2021 to 2023, while Russia’s Sakhalin Energy offered 36 cargoes for loading between April 2022 and March 2025, they added. Angola LNG also offered a spot cargo for loading in December. In buy tenders, India’s Gujarat State Petroleum Corp (GSPC) and Indian Oil Corp were looking for a cargo each for delivery in January, while Gail (India) issued a swap tender to buy and sell a cargo over January to February, sources said.

Source: LNG Global

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Corpus Christi drives U.S. LNG export feedgas to record high

Gas flowing to U.S. LNG (liquefied natural gas) export plants was on track for a record high on Wednesday (Nov 25) as Cheniere Energy’s Corpus Christi plant in

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Texas pulled in enough fuel to supply its three liquefaction trains. Corpus had been receiving small amounts of gas in recent weeks as it prepares to put the third train into commercial service during the first quarter of 2021. On Wednesday, Corpus was on track to pull in a record 2.0 billion cubic feet per day (bcfd), preliminary data from Refinitiv showed, which would be enough to supply gas to all three of its 0.66-bcfd trains. That boosted total feedgas to all six big U.S. LNG export plants to a preliminary 10.4 bcfd on Wednesday, which would top the current record of 10.3 bcfd set on Nov. 13. One billion cubic feet of gas can supply about 5 million U.S. homes for a day. Before hitting several fresh highs since late October, the previous LNG feedgas record was 9.5 bcfd on March 31. That was before buyers started canceling cargoes as coronavirus demand destruction caused prices in Europe and Asia to sink to record lows.

U.S. exports fell each month from March to July as LNG buyers canceled around 175 U.S. cargoes. Feedgas to the U.S. LNG export plants hit an 18-month low of 2.3 bcfd in August. But as global gas prices started rising over the summer, LNG buyers began buying U.S. gas again. The U.S. LNG plants, which together can pull in over 10-bcfd of feedgas, are operated by units of Cheniere (Sabine Pass in Louisiana and Corpus), Freeport LNG in Texas, Cameron LNG in Louisiana, Kinder Morgan (Elba Island in Georgia) and Berkshire Hathaway (Cove Point in Maryland).

Source: LNG Global/Reuters

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Oil Search switches focus to Papua LNG from PNG LNG

Australian independent Oil Search is switching its upstream development focus in Papua New Guinea (PNG) to the 5.33mn t/yr Papua LNG project, away from plans to

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add a third train to ExxonMobil’s 6.9mn t/yr PNG LNG venture. The Total-operated Papua LNG project and the third train at PNG LNG had been planned to be built at the same time, as part of an effort to lower construction costs. Papua LNG’s two trains will be located next to the existing trains at PNG LNG. But talks between ExxonMobil and the PNG government on an expansion of PNG LNG have stalled. Oil Search said today it is targeting initial engineering work for Papua LNG in 2022, a final investment decision in 2023 and first gas deliveries in 2027. The Papua LNG project will coincide with the emergence of new LNG demand in the Asian market Fettweis said. Total executives plan to go to PNG in December, he added. Total has a 40.1pc stake in Papua LNG, Oil Search has 22.8pc and ExxonMobil holds 37.1pc. The companies and the PNG government reached a gas agreement in September 2019 to enable the project to be developed. The agreement’s legislative amendments passed through Parliament on 11 November, Fettweis said. But the Papua LNG partners held off on project development as the PNG government and ExxonMobil negotiated a deal over the fiscal terms for development of the P’nyang gas field, which will provide feedstock for the third train at PNG LNG. No such deal has been reached and the project has stalled. Total last year planned to reach FID on Papua LNG in 2020, but the P’nyang delays and the impact of the Covid-19 pandemic have forced the firm to delay a decision by three years. Papua LNG will extract gas from the Elk-Antelope onshore gas fields, which are part of petroleum retention licence 15. PNG LNG, in which Oil Search has a 29pc stake, is the cornerstone of the company’s business in PNG. All of the project’s debt is expected to be paid by 2026, when the project will become a pure cash generation business for the firm, Fettweis said. PNG LNG is projected to produce 8.8 MMTPA in 2020, he said. It produced at an annualised rate of 8.9 MMTPA in January-September, the highest annualised rate in any nine-month period since operations began in 2014. Oil Search plans a 75pc reduction in exploration expenditure in PNG and intends to offload non-core exploration licences in the Pacific island nation, managing director Keiran Wulff said. “We do not need any more exploration acreage. We have plenty of oil and gas projects on our books to develop,” Wulff said. Oil Search plans to raise production to over 137,000 b/d of oil equivalent (boe/d) by 2028-30 from a projected 76,500 boe/d this year. Its cash-flow breakeven point is targeted to be $17-$20/boe by 2028-30, from $20-$22 now.

https://www.argusmedia.com/ru/news/2161351-oil-search-switches-focus-to-papua-lng-from-png-lng?backToResults=true

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Vietnam picks Tokyo Gas and Marubeni for $2bn LNG power plant

Japanese utility Tokyo Gas and trading house Marubeni will build a liquefied natural gas-fired power plant in Vietnam, betting on the emerging economy’s growing

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appetite for an energy source cleaner than coal. The Japanese companies have signed a memorandum of understanding with Petrovietnam Power — a member of state-run Vietnam Oil and Gas Group, known as Petrovietnam –and a local construction company for the project with an estimated total investment of 200 billion yen ($1.93 billion). The deal comes as China, Japan and South Korea lead the way in setting goals for cutting greenhouse gases in Asia in the coming decades. Natural gas plays a key role in such plans. LNG “will be an outperformer in the medium term,” a gas industry insider said. The Japanese companies and their Vietnamese partners will begin a feasibility study and negotiations on power pricing, with the aim of bringing the plant online in 2026. To be located in the coastal province of Quang Ninh about 200 km from Hanoi, the LNG power station will have a capacity of 1,500 megawatts, or the equivalent of one nuclear reactor. The all-encompassing project will include construction of a terminal for receiving LNG ships and for regasification, as well as a pipeline to the plant.

This is where LNG comes in. The fossil fuel is considered a relatively clean energy, with carbon dioxide emissions from its combustion about half of those from coal. Vietnam is moving forward with LNG-fueled power plants, many of which are expected to begin operating in the mid-2020s. Gas-fired power generation is projected to grow to 158.1 billion kilowatt-hours in 2030 from 44 billion kwh in 2020, according to government data. The LNG plant in Quang Ninh will mark the first overseas one-stop project for Tokyo Gas, which is eager to export its LNG know-how to markets beyond the stagnant Japan. Marubeni has similar projects involving steps from LNG procurement to power generation in Indonesia and Myanmar as well, working with other Japanese companies. Tokyo Gas buys LNG from six countries as of this year. If Japan’s energy demand shrinks in line with its demographic decline, this would weaken the country’s purchasing power, resulting in higher import prices. Tokyo Gas wants to broaden its markets to maintain its procurement edge.

https://asia.nikkei.com/Business/Energy/Vietnam-picks-Tokyo-Gas-and-Marubeni-for-2bn-LNG-power-plant

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$18-billion LNG project projected to meet mid-decade start despite COVID-19 delays

LNG Canada says it remains committed to delivering its first liquefied natural gas shipments in the middle of the decade despite setbacks from the coronavirus pandemic.

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The $18-billion project will liquefy natural gas from northeast B.C. in a plant at Kitimat in northwest B.C., where it will be loaded onto ships and transported to Asian markets. It is the only project that moved ahead to the construction phase among several that had been proposed in B.C. to tap into growing demand for energy in Asia and diversify from reliance on export to the U.S. The major players backing the project include Shell, Malaysian state-owned Petronas, state-owned PetroChina, Mitsubishi in Japan and South Korea’s KOGAS. LNG Canada says major work is well underway, including advanced site preparation, pile driving and dredging and construction of the marine terminal in Kitimat. During the summer, LNG Canada opened a major worker camp in Kitimat that can accommodate up to 4,500. In the spring, the project had to cut in half its 1,500 workforce because of safety concerns related to the coronavirus pandemic. With safety measures now in place, Canada LNG says there are more than 3,200 people working on the project.

However, one of the two players that won the engineering procurement and construction contract, Texas-based engineering firm Fluor Corp., acknowledged in an earnings call at the end of September that the project was behind schedule because of the pandemic. Fluor CEO Carlos Hernandez told investment analysts on the call that the company had been in discussions with LNG Canada about the project’s timeline. “At this point, things are as well as they could be under the circumstances,” Hernandez said. Calgary-based TC Energy, which is building the $6.6-billion Coastal GasLink pipeline component of the project, is also making progress. More than 500 kilometres of the 670-kilometre pipeline right-of-way has been cleared and nearly 50 kilometres of pipe has been put into the ground, according to information on the Coastal GasLink website. Less progress has been made on the 78-kilometre section that runs through Wet’suwet’en First Nation territory, which was the site of protests against the project earlier this year. Another, much smaller liquefied natural gas project, the $1.6-billion Woodfibre LNG project near Squamish, has seen construction delayed for a year because of the coronavirus pandemic.

Source: LNG Global [Edited]

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Exxon and Total in talks over Mozambique LNG resource-sharing deal

ExxonMobil and Total are in negotiations over their massive LNG projects in Mozambique, with each seeking to extract more gas from a shared field that straddles

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the two developments and cut costs, three sources familiar with the matter told Reuters. The talks between the energy majors also involve the Mozambican government, according to the sources, as it has to give final approval to any new agreement. The field that straddles the projects happens to contain gas that is thicker and therefore cheaper to extract and convert into LNG than reserves elsewhere in the projects. The volume each project could extract from the shared area was set out in a 2015 “unitisation” – or resource-sharing – agreement. However both U.S. major Exxon and France’s Total are now renegotiating that contract with each other, the sources said. The companies are looking to cut costs wherever they can, bruised by a COVID-19-induced collapse in global oil and gas prices and facing a worsening security situation in Mozambique. Success in the talks could be particularly important for Exxon, which still has to woo investors ahead of a delayed final investment decision (FID) on its $30 billion Rovuma LNG project, which the sources now don’t expect until early 2022. The FID on Total’s $20 billion Mozambique LNG project was made in June 2019. The current contract was signed by Eni and Anadarko. In 2017 Eni sold a stake in the Rovuma venture to Exxon, which is now the project operator, while Anadarko sold Mozambique LNG to Total last year. It allows the projects to extract a combined 24 trillion cubic feet of gas from the “straddling” reserves, with a 50/50 share in phase one of development. Now Exxon and Total are trying to rework the agreement to increase extraction from the straddling reserves as a way to boost efficiency and increase their projects’ annual LNG production, according to the sources. Mozambique’s state oil and gas company ENH, which owns 10% of Rovuma LNG, and 15% of Mozambique LNG, referred Reuters’ questions to the National Petroleum Institute (INP), the body that manages the nation’s energy development. The INP did not provide answers to Reuters questions. The Mozambique government has said it expects Exxon’s FID next year, but all four sources said it may instead come in early 2022, in line with estimates from Oslo-based research house Rystad Energy which put it at 2022 or 2023. “The investment will not be viable without security,” the official said.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/exxon-and-total-in-talks-over-mozambique-lng-resource-sharing-deal/79419597

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Natural Gas / LNG Utilization

Audi replaces diesel trucks with NGVs to supply plant in Neckarsulm

Audi Logistics at the Neckarsulm site, in southwest Germany, is becoming even more sustainable and relying on climate-friendly alternatives even for transports

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that cannot yet be carried out by rail. From now on, two trucks powered by LNG will supply the site with parts for the Audi A6 and A7 models, and another is to be added to the fleet by the end of the year.  They will replace conventional diesel vehicles and save up to 20% of CO2 and around 85% of NOx. On the path toward CO2-neutral production, Audi is taking a consistent approach and considering the entire value chain. For example, logistics plays an equally important role as vehicle production itself. The first finished vehicle transports have been conducted with “green trains” via Deutsche Bahn since 2010. In addition, up to three CNG trucks and one electric truck have been in use in local transportation at the site since 2016. So far, the use of alternative drive technologies for medium distances and long-distance transport has hardly been possible due to lacking infrastructure and technical restrictions. However, the Neckarsulm site has now found a first alternative to diesel trucks that is also suitable for longer transport distances. Audi bundles all activities and measures for reducing the ecological footprint in Production and Logistics in the cross-site Mission:Zero environmental program. The focus is on Audi’s key challenges of decarbonization, water use, resource efficiency, and biodiversity. One of the key objectives is to achieve CO2-neutral production locations by 2025.

http://www.ngvjournal.com/s1-news/c3-vehicles/germany-audi-replaces-diesel-trucks-with-ngvs-to-supply-its-plant-in-neckarsulm/

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Argentina: government of Mendoza unveils first 100% CNG-powered bus

The secretary of Public Services of the province of Mendoza Natalio Mema, the president of the Mendoza Transportation Society (STM) Daniel Vilches, and representatives of

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Corven Motors Argentina presented the first bus that runs on natural gas. The vehicle will be tested on some routes provided by the STM for about 60 days and passengers will be able to travel for free, so they can learn about the amenities offered by the unit. The bus has capacity for 60 passengers, hot/cold air conditioning, air suspension (2 in the front, 4 in the rear), power steering system and electric steering pump, three double doors (front, central and rear) and ramp for the disabled at the second door.  “We have received a prototype of this vehicle, which is of the same brand as the electrical unit that operates in the province, and we will receive different proposals and then make a tender and acquire them probably next year,” he added. “This is the first test of this type in motorization in Argentina, and we are grateful to Corven that has chosen the STM as the first national experience accompanied by the willingness of the Provincial Government to scale and improve the provision of the transportation service and lower the cost of the system. Because here there is an economic contribution that is linked to reducing the fuel costs and, of course, an environmental gain,” said Vilches. Luciano Lorenzo, representative of Corven, also highlighted “the commitment that our company has in the development of renewable energies and also the commitment to collaboration between the public and the private sector.”

http://www.ngvjournal.com/s1-news/c3-vehicles/argentina-government-of-mendoza-unveils-first-100-cng-powered-bus/

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German joint project confirms LNG boosts transition to clean mobility

LNG is an ideal replacement fuel for conventional diesel, as it is far more environmentally-friendly and easier to handle. That is the outcome of a joint pilot project run by

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RWE Supply &Trading and duisport, the operating company of Duisburg Port. The collaborative project, run with the scientific support of the University of Duisburg-Essen studied the use of LNG in the world’s largest inland port over a period of two years between 2018 and 2020. “LNG is already a good solution for reducing emissions in heavy goods transport and shipping, until alternative propulsion systems such as hydrogen or synthetic fuels become economically viable and available in sufficient quantities. We are therefore delighted that our partner Rolande has recently built an LNG station in the Port of Duisburg,” said Andree Stracke, Chief Commercial Officer Origination & Gas Supply at RWE Supply & Trading. “We have been striving for sustainable logistics at Duisburg Port for a long time now. Our joint project with RWE and the University of Duisburg-Essen has successfully shown that the use of LNG leads to a better environmental footprint. At the same time, the use of LNG is safe and offers convincing benefits in terms of economic efficiency, and in heavy vehicle transportation it has proved its worth as an alternative to diesel in the port area – and the trend is rising”, commented duisport CEO Erich Staake. Specialists from the University of Duisburg-Essen Mechatronics and Building Operation and Construction Management faculties accompanied the project as scientific advisors: “Our analysis shows that natural gas used in port vehicles is a practicable, everyday fuel alternative to the established diesel option and capable of lowering greenhouse emissions within the transport industry”, said the scientists. “This is underlined by the positive feedback we documented from Duisburg Port employees. They extensively tested the vehicles and tank station infrastructure under real operating conditions and found them fit for purpose.” RWE installed a mobile tank station at Duisburg Port to enable port-internal vehicles and the trucks of local truckage companies to fill up on LNG. The LNG converted vehicles made available by duisport were then tested under everyday conditions and compared to the performance of diesel-powered trucks. The university used data loggers and exhaust-fume trackers to analyze the data. The results revealed around 10% lower carbon emissions and a 50% reduction in carbon monoxide and nitrous oxide compared to diesel. The project thus comes to a clear result that vehicles powered solely by LNG significantly reduce environmentally-harmful emissions and local pollutants compared to vehicles with the same mechanical properties but fueled by diesel. In addition, the project analyzed the practical experience of the employees involved in the demonstration project. The outcome here was also positive. It was not just the fact that the drivers could hardly tell the difference between the LNG-powered vehicles and the diesel trucks. They also noticed the LNG-modified vehicles were significantly quieter to run. Overall the project partners invested around 1.5 million euros in this exercise, with about half of it coming from the European Fund for Regional Development, which accepted the project as part of its support regime for contestable climate-change-mitigation initiatives.

http://www.ngvjournal.com/s1-news/c1-markets/german-joint-project-confirms-lng-encourages-transition-to-clean-mobility/

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Urban distribution goes sustainable in Barcelona with 50 CNG Fiat Ducato

At one of its dealerships, the LIDERCAR group has delivered 50 CNG Fiat Ducato to the transportation and distribution company METHOD Advanced Logistics.

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The company has acquired, on a lease basis, 50 vehicles of the popular Fiat Professional model to renew its fleet. Fiat Professional currently has the most complete range of CNG-powered vehicles on the market. Its Natural Power range (gasoline-natural gas vehicles) is made up of the Panda Van, Fiorino, Doblò Cargo and Ducato models and offers a real and available alternative to traditional fuels for the transport of goods around the city. With the new natural gas Ducatos, METHOD expands its low-emission fleet, to continue offering an even more efficient and sustainable transport service. By the end of 2020, it plans to have a fleet of more than 30% low-emission vehicles, helping reduce pollution. In this way, the company adapts to the needs of its customers, meeting increasingly shorter delivery times with more sustainable resources from an environmental perspective and contributing to a more responsible transport model with the health of the planet. METHOD is a transport and distribution company founded in Barcelona in 2018, which offers advanced and efficient last-mile, high-volume, food delivery, and night-time B2B and B2C logistics solutions. Its clients include Amazon, PcComponentes, Brico Depot, Nespresso, Makro, Just Eat, Inditex or Rajapack, among others.

http://www.ngvjournal.com/s1-news/c3-vehicles/urban-distribution-goes-more-sustainable-in-barcelona-with-50-cng-fiat-ducato/

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First Dutch bio-LNG plant ready in 2021, fuel to be sold at Shell stations

Renewi, Nordsol and Shell have started the construction of the first bio-LNG installation in Amsterdam Westpoort. The new facility is an extension for the current

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processing of, among other things, outdated products from the supermarkets. With an investment of several millions, the technical partner Nordsol will be the first to produce bio-LNG in the Netherlands. The three initiators each fulfill a unique role in the new waste-to-energy chain. Renewi collects organic waste throughout the Netherlands, such as expired products, processes this waste and converts it into biogas during its fermentation. The Nordsol installation then processes this biogas into bio-LNG. Finally, Shell sells this bio-LNG at its filling stations. In the Nordsol plant, the biogas extracted from organic waste is converted into bio-LNG and liquid bio-CO2, a transparent and fair supply chain. Biogas consists of approximately 60% methane and 40% CO2. The technology makes it possible to efficiently separate pure methane from the biogas and liquefy it into bio-LNG. The CO2 by-product is reused in the market and therefore ensures an additional CO2 emission reduction. This leads to a 100% CO2 neutral fuel. The new plant will be operational within a year, as the standardized modules are produced elsewhere and connected on the Renewi site. The facility will soon produce 3.4 kilotons of bio-LNG per year, allowing more than 13 million kilometers of CO2 neutral driving, which is more than 370 times around the globe.

Bio-LNG will play an important role in the coming years in making heavy road and water transport more sustainable.

http://www.ngvjournal.com/s1-news/c1-markets/first-dutch-bio-lng-plant-under-construction-fuel-will-be-sold-a-shell-stations/

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DFW Airport recognized for betting on sustainability and biomethane

Dallas Fort Worth International (DFW) Airport has taken its commitment to sustainable initiatives to new levels – literally – by becoming the first airport in the world to reach

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newly established carbon neutral levels announced by Airports Council International (ACI). Already the first carbon neutral airport in North America in 2014, DFW Airport became the first airport to merit the new 4+ level in ACI’s global Airport Carbon Accreditation (ACA) program. DFW was recognized as the first carbon neutral airport in North America. As part of the ACA program, airports commit to reducing their emissions by making investments in heating and lighting efficiency technology, alternative fuel vehicles, public transport incentive schemes, less corporate travel, and stakeholder engagement to encourage further emissions reductions. Airports applying to become accredited must have their carbon footprints independently verified.

Through this initiative, DFW Airport dramatically reduced vehicle fleet emissions – the second largest segment of its carbon footprint – and as of June 2020, 70% of the natural gas used in the Airport’s fleet came from renewable sources. Not only did the change eliminate nearly 17,000 tons of CO2, it lowered airport operations and maintenance cost by $1 million per year. DFW Airport achieved its 2020 Strategic Plan goal to reduce carbon emissions by 15% per passenger two years early and has now set an ambitious target to achieve net zero carbon emissions by 2030, supporting the United Nation’s Race to Zero campaign.

http://www.ngvjournal.com/s1-news/c1-markets/dfw-airport-further-recognized-for-its-efforts-in-sustainability-and-biomethane/

 

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LNG as a Marine Fuel/Shipping

World’s largest LNG bunkering operation took place in Rotterdam

The CMA CGM Group has embarked on a major program to build a new class of LNG-powered vessels, as part of its drive to take the shipping industry’s energy

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transition to the next level. The CMA CGM JACQUES SAADE, the world’s largest containership powered by LNG and the CMA CGM Group’s flagship, began its first LNG bunkering operation in the Port of Rotterdam, which will play a key role in refueling the group’s LNG-powered fleet that operates regular services between Asia and Europe. Total’s bunker vessel Gas Agility started bunkering the container ship Jacques Saade with 18,000 m³ of LNG. The operation took around 16 hours to complete. Gas Agility, the world’s largest LNG bunker vessel, was built especially to supply ULCVs (Ultra Large Container Vessels) like Jacques Saade with LNG while they are loading or unloading their cargo. Jacques Saade is the first LNG-powered container vessel with a capacity of over 23,000-TEU containers. CMA CGM has ordered another eight of these ULCVs from the shipyard of Hudong-Zhonghua Shipbuilding, a full subsidiary of China State Shipbuilding Corporation. By 2022, the shipping company plans to have a fleet of no fewer than 26 LNG-powered vessels in service: nine 23,000-TEU ships, eleven 15,000-TEU ships and six 14,000-TEU ships. Like CMA CGM, we support the transition from heavy fuel oil to LNG as a transport fuel for shipping. At present, LNG is the cleanest fuel that can be considered scalable and affordable for this ship category. Moreover, the introduction of these new LNG-powered vessels supports the Port Authority’s ambition to serve as a key hub in the import, export, storage and bunkering of LNG. We feel honored that every year, these nine new ships will be bunkering some 300,000 m³ of LNG in Rotterdam. This is also good news for LNG throughput and storage activities in our port,” said Allard Castelein, CEO of the Port Authority.

http://www.ngvjournal.com/s1-news/c7-lng-h2-blends/worlds-largest-lng-bunkering-operation-took-place-in-the-port-of-rotterdam/

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Anglo American will use LNG-fueled fleet for global shipping operations

Anglo American announced the award of a 10-year charter contract for four LNG-powered capesize+ vessels, introducing natural gas into its chartered fleet for the first time.

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Designed to be larger than, but remain as flexible as, a conventional capesize vessel, the new builds will optimize cargo transport by increasing load and improving overall cost effectiveness. U-Ming Marine Transport will own the newly designed 190,000-deadweight ton LNG-fueled bulk carriers. The fleet will be built by Shanghai Waigaoqiao Shipbuilding in China and is expected to be delivered in 2023. “LNG is a readily available, commercially viable, lower emission solution which, combined with innovative technology designed to eliminate unburnt methane, will allow these new builds to provide a much improved environmental and more efficient performance,” he added. The fleet is expected to carry up to five million tons of product per annum, transporting iron ore from Anglo American’s operations in Brazil and South Africa to the company’s global customer base. The new builds will be flagged and registered in Singapore, which will also serve as prime LNG bunkering port, thereby avoiding deviations from trading routes for refueling purposes. Earlier in October 2020, Anglo American was among the founding signatories of the Sea Cargo Charter – created by some of the world’s largest energy, agriculture, mining, and commodity trading companies, with the aim of establishing a standard methodology and reporting framework to allow charterers to measure and align their emissions from ocean transportation activities. In 2019, the company also joined the Getting to Zero Coalition, an alliance committed to getting commercially viable deep sea zero emission vessels powered by zero emission fuels into operation by 2030.

http://www.ngvjournal.com/s1-news/c7-lng-h2-blends/anglo-american-will-use-lng-powered-vessels-for-global-shipping-operations/[Edited]

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Russia’s Novatek starts LNG ship-to-ship operations in Murmansk -data

Russian gas producer Novatek has started ship-to-ship loadings of liquefied natural gas from the Yamal LNG project near the northern port of Murmansk,

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shifting away from Norway, ship tracking data at Refinitiv Eikon showed on Monday (Nov 23). The company previously conducted such operations at a terminal at the Norwegian Arctic port of Honningsvag. However, Oslo has faced pressure from the United States to stop Novatek from using a Norwegian port, with Washington arguing that such operations undercut Europe’s energy diversification efforts by shoring up its reliance on Russian gas. Novatek has said it would eventually move the operations away from Norway. It was not immediately clear if it has already stopped those operations in Norway completely. Novatek unloads the LNG from ice-class tankers, which are more costly to use, onto more conventional gas carriers. According to the data, the tankers Nikolay Yevgenov and Yamal Spirit moored near Murmansk for loadings on Saturday. A source at the port in northwest Russia said that cargoes were expected to be loaded on the tankers on Tuesday. Novatek did not respond to a request for comment.

Novatek has a 50.1% stake in the Yamal LNG project on the shores of the Yamal peninsular. French energy major Total controls 20%, while Chinese CNPC and Silk Road Fund have 20% and 9.9% respectively.

Source: LNG Global/Reuters

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Endesa will invest €34.5 million in Spain’s biggest LNG bunkering hub

As part of its energy transition and decarbonization strategy, and with a firm commitment to reducing emissions, Endesa has presented a project to operate

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LNG bunkering operations for maritime transport in the terminal port of Los Barrios, in Algeciras Bay (Cádiz). To do this, it has allocated an initial investment of around 15.6 million euros. After a detailed analysis and incorporating the latest technology on the market, it will spend a total of around 34.5 million euros to adapt the facilities before 2023. After receiving authorization from the Port of Algeciras Bay Authority to extend the term of the concession for the current facility, the new terminal will reach a storage capacity of around 4,080 cubic meters and an annual volume of energy managed 1,100 GWh. With this capacity, the Cádiz terminal will become the main LNG bunkering port station in Spain. According to Endesa’s General Director of Energy Management, Juan María Moreno, “the strategic location of our terminal offers opportunities for growth and diversification into new lines of business, such as LNG bunkering, which are a good fit and will enable us to make progress with our decarbonization strategy by focusing on activities that lead to a reduction in emissions.” Parallel to the LNG bunkering activity, the possibility of new business lines in the terminal will extend to other sectors. The docks at Endesa’s current port terminal are suitable for all types of ships of any draft, which gives the Endesa facility in Los Barrios great flexibility and versatility. So far, Endesa has used this facility mainly to unload coal and store optical fibre and electrical connection cable. This expansion and modification will open the door to new business lines associated with LNG. In 2019, the company managed a distributed energy volume of 116,611 Gwh, of which 79,784 GWh corresponded to gas sales of 79,784 GWh.

The Los Barrios terminal has additional space for possible future expansion depending on the evolution of demand (two additional docks). The facility will be able to progressively increase its storage capacity as demand and supply for LNG bunkering grows from the initial 4,080 m3 to 10,000 m3 during the decade, with two additional docks. It is also planned to open a natural gas station to supply LNG by road.

The project has already been approved in the environmental authorization phase and has just received a ten-year extension of the port terminal concession from the Port of Algeciras Bay Authority to get the ball rolling. The work to adapt the facility, consisting mainly of installing tanks and the pipe network, will create up to 125 jobs in the construction phase until the end of 2022

The Bay of Algeciras in figures:

Around 30,000 ships / year make stopovers every year.

It is the leading port in the Mediterranean and ranks fourth in Europe in volume of activity, and 32nd in the world in container traffic.

> 100 million tons of total traffic.

> 4.5 million containers.

One of the most important bunkering ports in the world.

FO/GO bunker market of 2.2 million tons – (equiv. 1/3 of the gas market in Spain).

http://www.ngvjournal.com/s1-news/c7-lng-h2-blends/endesa-will-invest-nearly-e35-million-in-spains-largest-lng-bunkering-hub/

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Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane

 

Indonesia’s 2020 fuel demand seen down 7 per cent, biofuel consumption set to rise

Indonesia‘s 2020 fuel demand is expected to drop 7.2% from last year to 69.72 million kilolitres, before partially rebounding next year, official data from the

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Ministry of Energy and Mineral Resources showed on Monday (Nov 16). Total fuel consumption, which includes biofuel, will likely increase to 72.16 million kilolitres in 2021, the data presented to a parliamentary hearing by the ministry’s director general of oil and gas, Tutuka Ariadji, showed. Fuel consumption last year was 75.12 million kilolitres. Indonesia’s fuel consumption in the January to August period this year stood at 41.6 million kilolitres. The data also showed that biofuel consumption will likely edge higher next year to 9.7 million kilolitres, compared to 9.5 million kilolitres in 2020. In June, the Indonesian government allocated 9.59 million kilolitres of fatty acid methyl ester, a palm oil-derived feedstock for biofuel, for the country’s mandatory 30% biofuel blending program.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/indonesias-2020-fuel-demand-seen-down-7-per-cent-biofuel-consumption-set-to-rise/79244925

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LIFE SMART AgroMobility project will produce biomethane to fuel agricultural vehicles

The LIFE SMART AgroMobility project will work and research for the next three years in the production of biomethane from the processing of agricultural waste to later be

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used as fuel for agricultural vehicles and for biofertilizers. Its main objective is to demonstrate the viability of a new model for the waste management of livestock origin, through treatment and its subsequent use, taking into account technical-economic and environmental aspects. The project is planned to take place in a pig farm managed by the COPISO Cooperative, one of the partners in the project, which is located in Soria, in north-central Spain. The prototype will have microalgae biotechnology for the biomethane production and upgrading process and will have the capacity to supply fuel to two light vehicles. Additionally, and promoting processes based on circular economy, biofertilizer will be obtained from the biotechnological process. As a result of the recovery of the livestock residues in the form of biomethane, a double mitigation of emissions is obtained, since it would also imply a reduction in the demand for fossil fuels within the agricultural sector. LIFE SMART AgroMobility, which will run until 2023, has a total budget of 2.29 million euros, which is 55% co-financed by the LIFE Program of the European Commission. The LIFE Program is the only financial instrument in the European Union exclusively dedicated to the environment. Its overall objective for the period 2014-2020 is to contribute to sustainable development and to the achievement of the objectives and targets of the 2020 Europe Strategy and of the relevant EU strategies and plans on the environment and climate. The LIFE SMART AgroMobility project is part of the priority area “Mitigation of Climate Change” of the Climate Action Subprogram. LIFE SMART AgroMobility’s consortium includes: the Polytechnic University of Madrid (UPM), which leads the project, COPISO SORIA, the Regional Energy Agency of Castilla y León (EREN), Everis Ingeniería (EXELERIA), the General Foundation from the University of Valladolid (FUNGE), the Iberian Association of Natural and Renewable Gas for Mobility (Gasnam), Natural & bio Gas Vehicle Association (NGVA Europe) and the University of Valladolid (UVa).

http://www.ngvjournal.com/s1-news/c1-markets/life-smart-agromobility-new-project-will-produce-biomethane-to-fuel-agricultural-vehicles/

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Malaysia’s Petronas steps ups investments in hydrogen as part of carbon-free energy goals

Malaysia’s state energy firm Petronas on Friday said it is stepping up investments in hydrogen as part of a global push to produce carbon-free energy, even as the firm expands

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its portfolio in liquefied natural gas and renewable energy. “The trajectory for moving towards hydrogen is really picking up space,” Chief Executive Tengku Muhammad Taufik Tengku Aziz said during the APEC CEO Dialogues. “It is typically the same customer base in emerging Asia, who are making more pronounced noises and desire to create a market for hydrogen,” he added.Petronas, the world’s fourth-largest exporter of liquefied natural gas (LNG), this month announced its goal to become a net zero emitter of greenhouse gases by 2050 and also plans to increase its investments in renewable energy. Tengku Muhammad Taufik said, however, the challenge with hydrogen is in managing the supply chain and logistics. Petronas is working through Memorandum of Understanding and partnerships with techonology players to ensure it has the right capital and expertise to pursue the hydrogen agenda, he added. During the dialogue, Japan’s Ministry of Economy, Trade and Industry (METI) said it has already formulated its hydrogen strategy, but prices need to fall to the same level as LNG within the next two decades. “We believe hydrogen has one of the most important roles in achieving carbon neutrality, and is especially important to decarbonise sectors which are hard to electrify,” said Takeshi Soda, METI director of oil & natural gas division. The economic trauma caused by the coronavirus pandemic has pushed energy companies to increase investment in renewables, hydrogen and other low carbon alternatives, but fossil fuels will be their dominant business for the foreseeable future, industry executives say.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/malaysias-petronas-steps-ups-investments-in-hydrogen-as-part-of-carbon-free-energy-goals/79320745

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Finland’s first liquefied biogas production plant starts operations

Gasum has completed the modernization of its biogas plant in Turku, Finland, which has now become the country’s first to produce bio-LNG for transport, industrial and maritime needs.

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The expansion of the Turku biogas plant was one of the Sipilä’s Finnish Government key projects, Bioeconomy and clean solutions, the objective of which is to increase in a sustainable way the share of renewable energy of the energy used in Finland by, in particular, improving its availability. The plant will process around 130,000 tons of biomass a year, to produce around 60 GWh of bio-LNG a year, which corresponds to the annual fuel consumption of 125 heavy-duty vehicles or 5,000 cars. It will also produce around 4,000 tons of ammonia water for use as a recycled nutrient. This plant promotes the realization of the circular economy and the development of the gas market in the Turku region. “We’re one of the few companies in the Nordic countries to be able to provide industrial scale biogas production and distribution. Gasum is continuously investing in biogas plants and increasing the performance of our existing ones. Demand for biogas is growing in all segments and we are constantly pursuing new opportunities to increase production capacity. We are investing in the development of our plants so that we can take the circular economy even further. Demand for recycled nutrients is also showing development in different industrial sectors. Our Turku plant is a superb example of the realization of the circular economy,” said Johan Grön Vice President, Biogas, Gasum. Gasum is boosting its biogas production capacity by expanding existing plants, by building new ones and by increasing procurement of biogas from the production plants of other actors. The company now has 15 biogas plants in Finland and Sweden, making it one of the largest producers of biogas in the Nordics. Gasum plans to make 4 TWh of biogas available in the Nordics by 2024 through its own production and partners.

http://www.ngvjournal.com/s1-news/c1-markets/finlands-first-liquefied-biogas-production-plant-becomes-operational-in-turku/

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Sempra develops plan to inject hydrogen into California natgas grid

Sempra said its Southern California Gas Co (SoCalGas) and San Diego Gas & Electric (SDG&E) utilities were planning multiple hydrogen blending projects

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throughout their service territories. U.S. energy company Sempra Energy said Monday that two of its California utilities were developing a program to use surplus renewable power to produce green hydrogen that can be injected into the natural gas grid to help to reduce carbon emissions. Sempra said its Southern California Gas Co (SoCalGas) and San Diego Gas & Electric (SDG&E) utilities were planning multiple hydrogen blending projects throughout their service territories. “This hydrogen blending program is a key milestone in our efforts to decarbonize our energy system, while delivering affordable and reliable energy to 22 million California customers,” said Kevin Sagara, group president for Sempra Energy and chairman of SoCalGas and SDG&E. Sempra said SoCalGas expects to choose the location of the initial project in early 2021. The initial hydrogen blend level is planned at 1% and may increase to as much as 20%. Last year, SoCalGas set a goal to deliver 5% renewable natural gas, produced from organic waste, by 2022 and 20% by 2030.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/sempra-develops-plan-to-inject-hydrogen-into-california-natgas-grid/79380472

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US DOE funds hydrogen class 8 truck project led by Navistar & Cummins

Cummins Inc. and Navistar International Corporation will work together on the development of a class 8 truck powered by hydrogen fuel cells. The project will be funded

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in part through an award from the U.S. Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy (EERE) previously announced in August, as part of DOE’s “H2@Scale” initiative to develop affordable hydrogen production, storage, distribution and use.

“This vehicle will feature our next generation fuel cell configuration and provides a springboard for us to advance our hydrogen technology for line haul trucks,” said Amy Davis, Vice President and President, New Power at Cummins. “We are also excited to build on our strong relationship with Navistar, which dates back 80 years, and work together to lower costs and make hydrogen-powered vehicles more accessible for fleets to adopt.” The award is one of two DOE grants awarded to Cummins, totaling more than $7 million, and will aid in the development of an integrated fuel cell electric powertrain for heavy-duty trucks with operational performance and total cost of ownership that supports near-term, rapid, and substantial penetration of the truck markets. Hydrogen offers great opportunity in the commercial vehicle sector and we’re proud to be part of the team working to develop a complete solution for customers.” The prototype fuel cell class 8 truck will ultimately see a year-long field test. It will be integrated into Werner Enterprises’ fleet of more than 7,700 tractors and operated in real-world local and/or regional delivery operation out of Fontana, California.

“This integration aligns with our Environmental, Social and Governance initiatives as we continually look for new ways to reduce our carbon footprint,” said Scott Reed, Sr. Vice President of Fleet Purchasing & Maintenance, Werner Enterprises. “Testing the vehicle in real-world conditions will help paint a full picture of how the system performs over challenging road conditions, including both hot and cold climates. In addition to that performance data, we are excited about the opportunity to provide feedback from Werner professional drivers, mechanics and fleet management to help the project team develop a comprehensive total cost of ownership analysis.”

Source: Cummins

http://www.ngvjournal.com/s1-news/c7-lng-h2-blends/u-s-doe-funds-new-hydrogen-class-8-truck-project-led-by-navistar-and-cummins/[Edited]

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