NGS’ NG/LNG SNAPSHOT – APRIL 2020, VOLUME 1
City Gas Distribution & Auto LPG
National Green tribunal seeks CNG report
The National Green Tribunal on Tuesday directed the state government to submit a “comprehensive progress report” on bringing the environment-friendly compressed natural gas (CNG)
The bench observed that the state had taken almost no steps to expedite the supply of CNG to the city over the past two years, the lawyers said. The state has not submitted a detailed policy guideline to the bench about supply of the green gas to the city, in violation of an order of the tribunal issued in July 2018. “The bench observed that the public transport system should be covered by the CNG distribution network. Considering the critical situation in Calcutta and Howrah because of severe air pollution caused by auto emission, it had expected the state to take considerable steps by now but found nothing on record,” said environmentalist Subhas Datta, the petitioner in the case. “Subsequently, the bench directed the state to submit a comprehensive progress report on the matter on April 16, when the matter will again come up for hearing. The chief secretary has been asked to personally monitor compliance,” Datta said. The lawyer representing the state submitted that the pipeline for transporting the gas to the city was being laid. “The CNG is an absolute necessity in Calcutta to reduce air pollution,” said Anumita Roy Choudhury, of the Center for Science and Environment.
IGL to operate only 55 CNG stations in Delhi-NCR till March 31
Indraprastha Gas Ltd (IGL) on Monday (Mar23) said it will rationalise its services and operate only 55 of its CNG stations in Delhi-NCR till March 31
The company also said it would not provide new connections of piped natural gas during the period.
However, it added that the supply of piped natural gas (PNG) to household kitchens will remain uninterrupted during the period and area control rooms will remain functional to attend to any customer complaint received through ’24×7′ customer care or any other digital mode like e-mail, website or IGL Connect Mobile App.Delhi government on Sunday had said that borders with Haryana and Uttar Pradesh will be sealed from early Monday as the national capital goes for a lockdown till March 31.
First CNG fuel station of Panchkula to come up in April
THE much awaited first CNG fuel station of Panchkula district will be opening in April. Panchkula has over 5,600 registered CNG operated motor vehicles, which mostly consist three-wheelers.
Sources said several fuel stations situated in Panchkula were struggling to get the permit of running a CNG fuel station. The Panchkula administration was under pressure for it’s own CNG station ever since the UT administration banned the entry of Haryana registered auto rickshaws in Chandigarh, in December, 2019. So far, as many as 1,900 autos, majority of which are Panchkula registered, have been impounded in Chandigarh for entering Chandigarh without the permit. Raghubir Singh, member of the Tricity Auto driver union, said, “A CNG station in Panchkula had become necessary as the Chandigarh administration banned the entry of Panchkula registered autos in the city. It is difficult for autos to even enter Chandigarh to fill CNG.”
First batch of 60 CNG buses arrives in city
Nashik: The first lot of 60 new CNG buses arrived in Nashik on Monday. The passing and fitness tests of 25 buses were conducted by the Nashik regional transport office (RTO)
The NMC has already signed agreements with two private agencies to operate 200 CNG and 50 diesel buses. It is, however, yet to sign an agreement with the third private agency to operate 150 electric buses. While a Pune-based agency will operate 150 buses (120 CNG and 30 diesel), a Delhi-based agency will operate 100 buses (80 CNG and 20 diesel). Both the agencies have brought the first lot of 60 buses for certification. The remaining 190 buses would be brought to the city by March 25. The buses have been purchased by the bus operators, who will also provide the drivers. The NMC will pay charges on a per-kilometre basis. The civic body will also employ an agency to collect fares. Meanwhile, Ajay Boraste, the leader of opposition from Shiv Sena, opposed the project. “We are not against the public transport, but are against the NMC running the service. NMC’s financial condition is not good and bus service will add to the losses,” he said. He added that he had written to municipal commissioner Radhakrishna Game, seeking answers to various queries. “We will launch an agitation if we do not receive a reply in a day or two.
Maruti Suzuki unveils NGV option of India’s bestselling multi-purpose Van
Maruti Suzuki India Limited has introduced the BS6 S-CNG variant of country’s best-selling multi-purpose van, Eeco.
“Eeco has established a strong foothold with its excellent mileage, best-in-segment comfort, space and power, at a low maintenance cost. Offering best in class safety, its all-purpose built is ideal for versatile use. The multi-purpose van has earned the distinction of being ideal for family travel, while simultaneously being a dependable business vehicle. Taking forward its legacy, the Eeco BS6 S-CNG is designed to deliver optimum performance, safety, engine durability, convenience and mileage,” said Shashank Srivastava, Executive Director (Marketing & Sales), Maruti Suzuki India Limited. The new van is equipped factory fitted S-CNG, and specially tuned and calibrated to deliver optimum performance and enhanced drivability across all kinds of terrains. This is the fourth BS6 compliant S-CNG offering from Maruti Suzuki. The launch of Maruti Suzuki’s S-CNG vehicle range is aligned to and complements the Government of India’s vision of reducing oil import and enhancing the share of natural gas in the energy basket of the country from 6.2% now to 15% by 2030. The government is working to rapidly increase CNG refueling network in the country. There has been a phenomenal growth of 101% in new CNG station additions in the first 10 months of this fiscal year. A total of 259 CNG stations have been added across India in the period April 19 – January 20 versus 129 stations over the same period the previous year.
Indraprastha Gas looks to expand its physical reach to other cities
Being in a monopoly position in the National Capital Region, Indraprastha Gas Ltd (IGL), the country’s largest city gas distribution company, has seen a spurt in its business
The company — a joint venture of GAIL (India), Bharat Petroleum and the Delhi government — is planning to add 100 more compressed natural gas (CNG) outlets in the current financial year and increase its base in the industrial and commercial segments in geographical areas beyond NCR. At present, it has 5.9 million piped natural gas (PNG) connections and 1,989 CNG stations across the country. The company has earmarked Rs 1,100 crore for capital expenditure in FY20.’ During the last financial year, IGL provided 210,000 new PNG connections, taking the total to 1.1 million households. Another 850 new commercial and industrial users were added, taking their total number to 4,276. The company added 54 CNG stations, with the total number of gas stations crossing 500, which catered to nearly 1.1 million vehicles. IGL’s net profit grew 16.7 per cent year on year (YoY) in FY19 on revenue growth of 27 per cent. Nearly three-quarters of its revenues come from sales of CNG, with the remainder coming from PNG sales to residential and industrial/commercial segments and sales to other CGD networks. During the year, volumes grew 14 per cent overall. IGL expanded its pipeline infrastructure to 13,028 km in FY19, from 11,673 km in the previous year. IGL has now expanded beyond the Delhi region and has started building infrastructure in the geographical areas of Meerut (except area already authorised), Muzaffarnagar and Shamli districts in Uttar Pradesh. The company has also started supply of CNG and domestic PNG in earmarked areas of Gurugram and Karnal districts.
According to Ranganathan, IGL’s customer base will increase to 2 million in three years and will cross 2.5 million in eight years. In order to increase the average consumption from the current 0.34 standard cubic metres per day (scmd) to 0.5 scmd, IGL is promoting gas appliances such as geysers and rice cookers through its channel partners. Besides, diesel gensets will be another area of growth. “A diesel genset generates power at Rs 19 a unit, but with gas it can be done at Rs 14,” says Ranganathan. While IGL faces the challenge of its markets being opened up to other plays, it is looking to expand its physical reach to other cities by bagging more geographic areas in the CGD bidding round. “We have 16 districts in three states of Uttar Pradesh, Haryana and Rajasthan with us. These areas will start contributing to our growth in five years,” he says.
Moody’s downgrades ONGC ratings, outlook negative
Moody’s Investors Service on Tuesday downgraded the credit quality rating of state-run Oil and Natural Gas Corporation (ONGC) by one notch to ‘Baa2’,
mainly due to its weak cash reserves amid the increasingly uncertain global oil price environment. The company’s rating was also adversely affected by the government’s 2016 mandate which requires all government-owned companies to pay a minimum annual dividend, equal to 5% of their net worth, even if they do not have sufficient profits.
“The rating outlook is negative in line with the outlook on India’s sovereign rating,” said Vikas Halan, senior vice-president, Moody’s. As FE recently reported, ONGC is set to “adopt a balanced approach towards capital spending,” and expects the government to take favourable policy measures to boost the company’s performance. Share price of ONGC on the BSE has fallen 33% from Rs 93.30 on March 3 to Rs 62.50 on Tuesday-end, as global crude oil prices continue to fall and the widening spread of the coronavirus outbreak. ONGC has recently approved the payment of interim dividend at Rs 5 per share, which is at 100% of face value, to the shareholders. Moody’s noted that it resulted in cash outflows of about Rs 6,300 crore, reducing cash reserves. ONGC had consolidated cash and cash equivalents of Rs 6,700 crore on September 30, 2019, which was much lower than the reserve of Rs 24,700 crore at FY16-end.
The company’s cash reserves have been depleting over the past three years because of high dividends, the acquisition of Hindustan Petroleum Corporation Ltd in 2018 and share buyback in 2019. Over the same period, ONGC’s net borrowings increased to about Rs 1 lakh crore from Rs 21,500 crore. Obligations rated ‘Baa’ by Moody’s are judged to be medium-grade and subject to moderate credit risk and “may possess certain speculative characteristics”. https://www.financialexpress.com/industry/moodys-downgrades-ongc-ratings-outlook-negative/1908513/
ONGC exudes confidence of withstanding current volatility; declares 100% interim dividend
ONGC said the right level of prices at which the industry can operate and some sort of an equilibrium can be achieved will restore sooner than later.
Historically, in previous instances of sudden oil prices decline, the recoveries have also been sharp and in some cases ‘V’ shaped. State-owned Oil and Natural Gas Corp (ONGC) on Monday declared 100 per cent interim dividend and said it has sufficient funds to continue operations in an era of extreme volatility in oil prices. In a statement, ONGC said its board of directors met on Monday and “declared an interim dividend of Rs 5 per equity share of Rs 5 each.” The government, which owns 62.78 per cent stake in ONGC, will get Rs 3,949 crore in dividend and taxes. The company further said the sudden and sharp decline in crude oil prices in the last few days had let to a lot of volatility in the sector, hitting share prices of upstream oil and gas producer firms. The outbreak of coronavirus which dampened global demand and the failure of talks of OPEC+ to arrive at an agreement on production cut has led to a drastic decline in oil prices. ONGC said the right level of prices at which the industry can operate and some sort of an equilibrium can be achieved will restore sooner than later. Historically, in previous instances of sudden oil prices decline, the recoveries have also been sharp and in some cases ‘V’ shaped.
Stating that the company has performed satisfactorily on production as well as profitability front in the present situation, ONGC said it “has sufficient funds to continue its operations.” “The decline in crude prices has additionally created a need for us to carry out a detailed review of activities to look for opportunities to optimize operating costs to preserve liquidity. The company has already started taking steps to create a detailed strategy to get over this situation if the crisis prolongs,” the statement said. ONGC has a balanced portfolio as it is present across the value chain — upstream, refining and marketing, and is better positioned to face any headwinds, it said. “It is felt that while at upstream level, lower oil prices are temporary headwinds, as a Group, in the medium term the company will get a strong boost through a contribution from downstream units. ONGC Group fundamentals continue to be strong and as an integrated group it is far more strongly positioned to face the present situation,” it added.
Manikaran Power becomes the first member of India’s gas trading platform
The gas trading platform of Indian Energy Exchange (IEX) has found its first member in Manikaran Power Ltd (MPL). Called the Indian Gas Exchange (IGX),
it will be India’s first gas trading platform. IGX would offer spot and forward contracts at Dahej, Hazira and Kakinada. While Petronet LNG Ltd (PLL) operates a LNG terminal at Dahej, Shell operates another one at Hazira. Kakinada is the landfall point for natural gas being produced from the Krishna Godavari basin. IGX commenced its membership drive in February this year. MPL which is already trading member in IEX, is the first to join hands with IGX. MPL is an inter-state trading licensee and a trading member on IEX and trading cum clearing member on Power Exchange India Limited (PXIL). It was founded in 2008 by Navjeet Singh Kalsi and Jaspreet Singh Kalsi. The company has its headquarters in Kolkata and offices sprawled across Delhi, Mumbai, Bangalore, Hyderabad, Chennai, Vadodara and Ahmedabad. MPL provides electronic platform for trading of power at IEX and PXIL, documentation and assistance in bilateral trading of power, REC trading and group captive. Its website states that it has close to 2,000 clients in both power trading and RECs.
“In the past few years, India’s energy mix is shifting towards clean, green and sustainable energy which is indeed an imperative not only from an economic perspective but also from long-term energy security consideration. At MPL, we commend the move to build a gas exchange by IEX. Having been a major contributor to IEX’s platform for over more than a decade, we are confident that the IGX will also be equally a transformational platform,” said Navjeet Kalsi, managing director, MPL. IEX is planning an initial investment of Rs 10 crore for IGX over the next five years. Senior executives said this was planned keeping in mind the growth potential of the gas market. “Gas market in India is poised for a break out growth of 2.5X, from 166 to 380 MMSCMD by 2030. With conducive policies, the share of natural gas in India’s energy basket could double to 15 per cent,” said an investors’ presentation by the company.
“The Exchange will steadily accelerate India move towards a gas-based economy. Manikaran coming on board early on the platform underpins the trust and credibility of our members on us and we look forward to welcoming other members to IGX,” said Rajesh Kumar Mediratta, Director-Strategy and Regulatory IEX and Director, IGX.
ONGC gas output drops by one-tenth as shut factories refuse supplies
With the unprecedented nationwide lockdown shutting down factories, ONGC has been forced to cut natural gas production by up to one-tenth as customers refused
to take supplies because of business disruption. Oil and Natural Gas Corp (ONGC), which produced 64.5 MMSCMD till earlier this week, has reduced the flow to 59.8 MMSCMD on Wednesday (Mar 25), and will further cut by another 3 MMSCMD on Thursday, sources aware of the development said. The company has received requests from customers for reduction in gas supplies of around 7.7 MMSCMD.
Besides this, another 4-5 MMSCMD supply reduction requests have been lodged with the gas transporter GAIL. The sources said these customers are largely small companies whose business has been completely shut because of the lockdown, and city gas distributors who have seen volumes vanish after CNG vehicles went off-road. In the most far-reaching measure undertaken by any government to check the spread of coronavirus pandemic, Prime Minister Narendra Modi on Tuesday evening announced a three-week-long nationwide lockdown. The lockdown meant offices and factories, barring those involved in essential supplies business, are shut and people asked to stay at home. So far, 562 persons are reported to have infected with the virus and as many as 9 killed.
Indian LNG importers issue force majeure notices as gas demand slumps- sources
Indian liquefied natural gas (LNG) importers have started to issue force majeure notices as domestic gas demand slumps and as port operations in the country
get hit by a lockdown to curb the spread of coronavirus, sources told Reuters. “Demand has reduced drastically and it is likely to go down further, a company source with Gail (India) said. “Only fertiliser, power and refineries are running at parcel loads. Other local buyers have already issued force majeure so where should we sell LNG,” the source said. Because of falling local demand, gas output of Oil and Natural Gas Corp could be hit, its Chairman Shashi Shanker told Reuters. “As of now there is no impact on the production of oil and gas, but in the coming days gas production might get affected because of less off-take in view of the decrease in domestic demand,” he said.
Source: LNG Global
Indian cooperation will boost adoption of LNG in transportation
INOX India Pvt Ltd, has signed a Memorandum of Understanding (MoU) with Shell Energy India Pvt Ltd. for partnering and developing the market
for LNG supply by road from Shell’s LNG Terminal in Hazira (District Surat), Gujarat. The MoU envisages deployment of distribution infrastructure including logistics and receiving facilities at customer end, and will offer LNG access to the customers not connected to the pipelines. This will help in increasing the penetration and consumption of clean, reliable and cost-efficient LNG to commercial and industrial users all over the country.
The MoU also covers the cooperation in developing a larger market for LNG as a transport fuel for long-haul heavy-duty trucks and buses. Shell Energy India owns and operates a 5 MMTPA LNG Receiving, Storage and Regasification Terminal in Hazira, Gujarat. It is also building a truck loading facility at its Hazira Terminal and the partnership with INOX, will help develop the market for LNG as a preferred fuel in the rapidly growing city gas distribution, LCNG and industrial sector as well as usage of LNG as a vehicle fuel. “Our partnership with Shell, underlines our innovativeness and our futuristic approach. LNG is not only a clean and cost-effective fuel but is also safe and reliable. We are delighted that our collaborated efforts will make this green fuel more accessible. A larger gas-based industrial ecosystem augurs well with Indian economy as well as for the environment at the same time, and is a win-win situation for all stakeholders,” said Siddharth Jain, Executive Director, INOX India Pvt Ltd.
“We look forward to working with INOX to deliver LNG by trucks and create access to LNG for customers not connected via pipeline. There is a growing demand for gas, the cleanest-burning fossil fuel, from the City Gas Distribution sector, commercial and industrial customers and as a fuel for heavy-duty transport. We are excited to explore this new segment and develop other such partnerships which will enable us to continue playing a key role in meeting India’s long-term need for more and cleaner energy,” commented Ashwani Dudeja, Country Head, Shell Energy India.
How India’s newest LNG import terminal is cutting onshore capex
Plans by the Indian government to grow the use of natural gas by 150% in the country’s energy mix by 2030 will require the construction of new LNG terminal capacity.
Already the world’s fourth largest importer of LNG behind Japan, China and South Korea, India has five terminals in operation, with 11 others either under construction, in development, or proposed. In February, downstream gas and LNG logistics company Atlantic Gulf and Pacific (AG&P) broke ground on a new LNG import terminal at Karaikal Port, a deepwater port about 280 km south of Chennai on India’s east coast. With a target opening of Q4 2021, Karaikal LNG import facility will be owned and operated by AG&P, with an initial capacity of 1 MMTPA, with the possibility of doubling capacity. In close proximity to Tamil Nadu’s thriving manufacturing clusters, the new LNG import terminal will provide natural gas to power plants, industrial and commercial customers within a 300 km radius.
The region is home to a wide range of industries including agriculture, textiles, steel, cement and manufactured goods, power plants and other processing factories. Karaikal LNG will serve AG&P’s city gas networks and other city gas companies that bring compressed natural gas (CNG) and LNG to vehicles and piped natural gas (PNG) to households and businesses. Using truck loading bays at the terminal, AG&P will use its own fleet of tanker trucks to deliver LNG to remote customers. AG&P president, LNG terminals and logistics Karthik Sathyamoorthy tells LNG Shipping & Terminals that the Karaikal LNG import facility is part of the US$1.3Bn capital investment that AG&P is making in India’s gas and LNG infrastructure over the next eight years. Roughly 70% of this is funded by traditional project financing, with a mix of Indian and international lenders. About US$1.2Bn of the capex will go towards the development of AG&P’s city gas distribution (CGD) networks in Rajasthan, Andhra Pradesh, Tamil Nadu, Karnataka and Kerala. In these populous and industrialised states, AG&P has been awarded exclusive licenses by the Indian government to establish CGD networks in 28 districts in 12 geographic areas. Together, these networks will cover roughly 8% of India’s land area, according to MrSathyamoorthy.To expand access of natural gas to gas-powered vehicle owners, AG&P will build more than 1,500 compressed natural gas (CNG) stations. “We will also lay 17,000 km of steel pipelines to build PNG connections to households, factories and commercial businesses such as hotels and shopping malls,” says MrSathyamoorthy.
Natural Gas / Transnational Pipelines/ Others
Exxon pledges ‘significant’ cut to spending amid coronavirus, unrelenting oil price slide
The largest U.S. oil producer Exxon is reevaluating an about $33 billion capital spending budget set when prices were higher, and will details
specific cuts later, chief executive Darren Woods said in a statement Exxon Mobil on Monday (Mar16) said it will make “significant” cut to spending in the face of the unprecedented slide in oil prices due to the coronavirus outbreak. The largest U.S. oil producer is reevaluating an about $33 billion capital spending budget set when prices were higher, and will details specific cuts later, chief executive Darren Woods said in a statement.
Developing nations may lose up to 85 per cent of oil and gas income this year: IEA, OPEC
Developing nations’ oil and gas income will fall by 50% to 85% this year to a more than two-decade low if current market conditions persist,
the International Energy Agen per centcy and OPEC said in a rare joint statement on Monday (Mar 16), citing recent IEA analysis. This is likely to have “major social and economic consequences”, notably for public sector spending in vital areas like healthcare and education, the statement from IEA director Fatih Birol and OPEC secretary-general Mohammad Barkindo said. Oil prices slid below $30 a barrel on Monday as the global spread of coronavirus became more entrenched, leading to lockdowns as the global economy appeared to be headed toward certain recession. The oil price rout was exacerbated by the collapse of an alliance between the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia which had been withholding production from the market. The statement did not expressly mention the alliance’s leaders Saudi Arabia and Russia, which have started a price war for market share, but called for market stability.
US shale producers cut executive pay as oil prices crash
Shale firms this month cut 25 per cent to 50 per cent of planned spending as falling demand from coronavirus and a price war between Saudi Arabia and Russia threw the oil market into a free fall. US oil prices are down more than 60 per cent this year to about $22 a barrel, from $61 a barrel in December. The shale industry was already under pressure following a decade of dismal investor returns. Now it faces “essentially the atomic bomb equivalent in the oil markets,” said Louise Dickson, analyst at Rystad Energy. “These are unprecedented times,” said Parsley Chief Executive Matt Gallagher. “It is important to take the first step and a serious, meaningful step as a unified executive management team.
” US shale producer Parsley Energy Inc said on Wednesday it would slash executive pay 50 per cent, the deepest such cut announced so far. Parsley cut planned spending 40 per cent and has sent a letter to suppliers asking for cost reductions. Gallagher said that suppliers and employees need to know, “That we are in it together.” Liberty Oilfield Services Inc last week said its executives would take a 20 per cent pay cut. Matador Resources Co said it would cut CEO and board pay by 25 per cent and other executive pay by 20 per cent. The hard hit airline industry has also announced executive pay cuts. United Airlines Holdings Inc, one of the three largest US airlines, said that planes could be flying nearly empty into the summer and that it would cut corporate officers’ salaries by 50 per cent. Scandinavian airline SAS said it would temporary lay off up to 90 per cent of its workforce and trim executive pay 20 per cent.
Shale producers EOG Resources Inc, Pioneer Natural Resources, Whiting Petroleum Corp and EQT Corp are among those that have cut drilling activity and budgets this week, though they have not announced plans to reduce executive pay. Top US oilfield services provider Halliburton Co said on Tuesday it will furlough about 3,500 employees in Houston for 60 days as its customers slash spending. Directional driller Payzone Directional Services this week said it would halt operations. After the shale boom pushed the US to become the world’s top oil producer with output of around 13 million barrels per day, the country’s output could fall 1.3 million bpd over the next five quarters, Goldman Sachs said.
Global oil and gas majors announce major spending cuts as industry stares at oil at $30
Global oil and gas majors across the world have announced major cuts and austerity measures as the industry stares at oil prices below $30 in 2020,
with major economies around the globe implementing travel restrictions and lockdowns to deal with the ongoing Covid-19 pandemic. To make matters worse for oil and gas companies, the industry is in the midst of an oil market share war between two of the world’s largest oil and gas producers Russia and Saudi Arabia. Consultancy firm Rystad Energy said in a report that $100 billion could be cut away from Exploration and Production companies budgets in 2020 and the reduction could grow further to $150 billion in 2021 in a $30 scenario.Rating agency Moody’s has projected the oil price decline in 2020-21 will reverse in the medium term.
“Unlike a few years ago, we see this decline as being mainly driven by cyclical factors (set off by the coronavirus shock to the global economy) and therefore have not changed our expectation that in the longer term oil prices average around the midpoint of our medium-term oil price range of $50-$70/barrel,” Moody’s said in a statement.The agency noted that in light of many E&P companies announcing capital spending cuts, drilling and oilfield service companies (OFS) will have to deal with lower revenue and earnings.Royal Dutch ShellThe latest austerity measures were announced by the British-Dutch multinational oil and gas company Royal Dutch Shell on Monday. The company announced reduction of underlying operating costs by $3-4 billion per annum over the next 12 months compared to 2019 levels along with reduction of cash capital expenditure to $20 billion or below for 2020 from a planned level of around $25 billion.“Together, these initiatives are expected to contribute $8-9 billion of free cash flow on a pre-tax basis. Shell is still committed to its divestment programme of more than $10 billion of assets in 2019-20 but timing depends on market conditions,” the company said in a statement.
French multinational oil and gas company Total S.A. too announced measures to combat the fall in oil prices. Chairman and Chief Executive Officer (CEO) Patrick Pouyanné while addressing the group’s employees on Monday talked about two core strategies on organic pre-dividend breakeven of less than $25 per barrel and low gearing to face high volatility. Pouyanne unveiled the group’s strategy to cut organic capex by more than $3 billion, savings of $800 million on operating costs in 2020, from $300 million announced earlier along with a suspension of buyback program. The company had earlier announced a $2 billion buyback for 2020 considering a $60 per barrel oil price; it bought back $550 million in the first two months.
American multinational oil and gas company ExxonMobil had last week announced evaluating significant near-term capital and operating expense reductions.“Based on this unprecedented environment, we are evaluating all appropriate steps to significantly reduce capital and operating expenses in the near term. We will outline plans when they are finalized,” Darren Woods, chairman and chief executive officer said in a statement.
Bernard Looney, the new CEO of British multinational oil and gas giant BP in a statement indicated that the company will reduce capital and operational spending in light of the pandemic.“To protect the health of our company we are making interventions to reduce capital and operational spending. bp is strong and, importantly, we have navigated challenges like this before. We know what to do,” Looney said in a post on 13 March.
American multinational oil and gas giant ConocoPhillips also last week announced plans to reduce capital spending by 10 per cent in 2020.”We’re reducing our 2020 capital program by approximately 10 per cent or $700 million. We’ll source these reductions from decreases in operated and expected decreases in non-operated development activity in the Lower 48 and deferral of development drilling programs in Alaska,” Ryan Lance, chairman and CEO of the company told analysts in market update conference call on 18 March.Lance added that the reductions will impact 2020 production by about 20,000 barrels per day of oil equivalent and the company will reduce share repurchases from a run rate of $750 million per quarter to $250 million per quarter, starting in the second quarter. The measures taken would result in about $2.2 billion of planned 2020 cash uses that will not be deployed.
American multinational energy corporation Chevron was one of the first oil majors to confirm and announce reduction in capital expenditure for the year. “We are reviewing alternatives to reduce capital expenditures, that are expected to lower short-term production and preserve long-term value,” it said in a statement to Reuters in early March.
German logistics firm plans to have 20% of its fleet fueled by LNG in 2025
Hegelmann Group, a German-based freight and logistics company, has added five Iveco Stralis 460 NP powered by LNG.
It is planned that by 2025 such trucks will make up at least 20% of the company’s fleet, which currently includes about 4,000 vehicles. These trucks will not only reduce pollution, but also contribute to the effectiveness of the company’s activities. “As one of the largest carriers in Europe, we feel responsible for creating a more sustainable environment. For us, it is like a mission – we aim to introduce our customers to new trucks and show them that they are as efficient as diesel. At the same time, it is a new and long-term way to create sustainability, and customers have the opportunity to contribute to it,” said Siegfried Hegelmann, a shareholder in the Hegelmann Group. “We have discussed this solution with the Hegelmann Group and I have no doubt that this company is fully committed not only to business development but also to sharing – it already participates in major social programs, sponsors schools and hospitals, and this less polluting transport option is a great future insight.
A company that is mature, well-versed in this area of business and its mission in this world should be the one to think about such things,” commented Ernestas Jakubonis, Head of Iveco’s Representative Office in the Baltic Area. The development of the Hegelmann Group’s fleet of LNG trucks will depend not only on how customers appreciate the service, but also on the LNG station infrastructure in Europe. Hegelmann hopes that this technology will spread rapidly and that the company will be able to carry out its planned expansion and that truck routes will extend across the continent. For the time being, the geographic directions of these five trucks will go via Germany to France and Italy, and there will also be a number of round trips.
Agility awarded CNG fuel storage systems order
compressed natural gas (CNG) fuel storage systems. The order represents an estimated total value of $10 million. The North American CNG transit bus market continues to grow steadily, driven by the environmental benefits and operating cost savings of CNG. About 35% of new transit bus orders are powered by natural gas.
“CNG is one of the cleanest burning fuels available. We’re happy to deliver cleaner air to the city of Los Angeles, where these fleets operate”, says Seung Baik, president of Agility Fuel Solutions. Deliveries of the fuel systems are expected to commence in July. Agility Fuel Solutions, a wholly-owned subsidiary of Hexagon Composites ASA, is a global provider of clean fuel solutions for medium- and heavy-duty commercial vehicles. Its product offerings include natural gas, hydrogen and battery electric energy storage and delivery systems, Type 4 composite natural gas cylinders, propane and natural gas fuel systems, and propane dispensers.
Argentina: IVECO presents locally-produced Tector CNG truck
IVECO Argentina made the first product launch in the year: the commercialization of the CNG Tector of national manufacture. “
Today, like more than 50 years ago, we continue to bet on national production. Therefore, with more than 110,000 units produced and meeting the quality standards required by market demands, we are launching four new trucks, three of them designed and manufactured in our Córdoba-based plant,” said Francisco Spasaro, Commercial Director of IVECO Argentina. In 2019, the firm presented the first CNG commercial vehicles in the country. “A year ago we marked a milestone in Argentina with the launch of the Natural Power range. This line responds mainly to a change in the energy grid in our country. We continue to offer our carriers a more profitable and ecological solution for their operations,” Spasaro added. The CNG Tector, which extends the “Natural Power” range, in a rigid version and 4×2 configuration with denomination 160E21, is powered by the FPT Industrial’s OTTO cycle NEF 6 engine, with 210 HP and 750 Nm of torque.
With six 80-liter CNG tanks, it offers an approximate range of 300 km. It also offers power and a low level of gaseous and sound emissions, being an alternative for night missions. The truck has a front parabolic suspension, a six-speed gearbox in the front and a driver’s seat with air suspension that gives the new Tector a high level of ride comfort. Its interior is modern and ergonomic, with a command to change the cable integrated into the dash. On the other hand, the Stralis Hi-Road in its 440S33T 4×2 tractor and 260S33Y 6×2 rigid configurations, both CNG, is also expanding IVECO Argentina’s “Natural Power” portfolio.
Gasrec delivers clean fuel with ADR specified Volvo natural gas vehicles
Gasrec’s tanker deliveries are now being made by the latest generation natural gas-powered vehicles. Reynolds Logistics has put two new ADR specified Volvo FM LNG 6×2 tractor
units into operation, working exclusively on its Gasrec contract. Reynolds runs approximately 90 trucks across the UK, specializing in the delivery of bulk fuel, hazardous liquids and lubricants. The new vehicles will deliver to Gasrec sites around the country – including Sittingbourne, Swindon, Tamworth and the company’s flagship refueling site next to the Daventry International Rail Freight Terminal (DIRFT). Gasrec projects that one-third of the UK’s 44-ton heavy truck market will have transitioned to natural gas within the next seven years, with approximately 39,000 natural gas HGVs on the country’s roads. “As a company we believe it is crucial we practice what we preach, so to now be delivering all of our LNG using the latest technology gas-powered trucks is an important landmark,” said James Westcott, Chief Commercial Officer at Gasrec. “Natural gas is cleaner and cheaper than diesel and is currently the only truly sustainable alternative fuel source available on the commercial vehicle market.” The two new FMs – which have a range of around 450 miles when pulling a fully-loaded tri-axle gas tanker – are based at Reynolds’ site in Grays and will load daily at the Grain LNG terminal on the Isle of Grain.
They are each powered by Volvo’s G13C LNG engines, which develop up to 460 HP and a peak torque of 2,300 Nm – on a par with a regular diesel model with the same power rating, whilst reducing CO2 emissions by as much as 95% when fueled with biomethane. “We’re excited to see where natural gas will take the industry. The experience for us so far has been really positive – our drivers are very happy with the performance of the new vehicles. We like to consider ourselves a forward-thinking company. These LNG-powered trucks have very clear environmental benefits and we believe it’s our responsibility to play our part in helping to reduce air pollution as much as we can,” commented Andrew Reynolds, Chief Executive Officer at Reynolds Logistics.
Belarusian minister unveils new refuse truck powered by CNG
A refuse collection vehicle powered by natural gas was presented at premises of Mogilevtransmash plant, owned by MAZ. Belarusian Housing and
Utilities Minister Aleksandr Terekhov and potential buyers of municipal vehicles from various parts of the country were made familiar with technical parameters of the new product. “The new vehicle is fully compliant with the requirements the head of state wants the utilities industry to meet. The use of compressed natural gas will reduce fuel-related operating costs. The vehicle’s size and maneuverability will help smartly build the logistics of removal of solid municipal waste from backyards,” said the minister. The first commercial CNG garbage truck has been assembled by Mogilevtransmash. It is equipped with two gas cylinders made of composite materials and able to store 420 liters of CNG. It is also fitted with mud chambers to keep liquid waste from leaking around the vehicle, and with a monitor and a rearview camera for ease of use.
The low environmental footprint is a major peculiarity of the new vehicle, but in addition, the noise it generates is lower than usual. One vehicle was already delivered to a Mogilev-based company on March 12. The truck will be trialed in the city for several months in real conditions. “We have all reasons to believe that the vehicle will pass the trial with flying colors and the new refuse collection vehicles will enter into service of utility enterprises all over the country soon,” Terekhov added. Mogilevtransmash representatives explained the garbage truck has already passed all the safety and environmental tests, and has been certified for compliance with Customs Union regulations. The company intends to sell the trucks not only in Belarus but in other CIS (Commonwealth of Independent States) states in the future, reported news agency BelTA.
U.S. distribution and manufacturing company switches forklifts to CNG
Houston-based Building Products Plus, supplier and manufacturer of structural timber products and extended-life building materials for marine & shoreline,
zoos & recreation, commercial, industrial, and high-end residential markets, has taken another step toward running leaner and greener by switching their entire fleet of forklifts from diesel to CNG forklifts. These new forklifts are expected to reduce the company’s output of NOx by 3 tons per year, roughly a 90% reduction in emissions compared to their old diesel forklifts. The new CNG-powered Hyster forklifts with Kubota engines are simply “another step in the right direction,” according to Founder and President of Building Products Plus, Dorian Benn. “We are always seeking to improve, and part of that is running a cleaner operation overall. These forklifts operate much more cleanly, are powerful and reliable, and make sense, financially-speaking. It’s a win, win,” he added. Houston is on the Environmental Protection Agency’s (EPA) list of non-attainment zones because of poor air quality, and diesel engines are the largest contributing factor.
In this regard, EPA offers grants to help with the cost of switching out the old, dirty diesel machines with new low-emission CNG-powered ones. As an example, the grant provided to Building Products Plus offset their investment in the new fleet of natural gas forklifts by 57%.Several years ago, Building Products Plus switched their entire delivery fleet, including semis and tilt-bed trucks, to all CNG-powered trucks. They are an approved supplier and manufacturer of SFI Certified products©, and many of their products are selected and offered because of minimizing environmental impact. Being ‘green’ is a consideration in everything they do from the products they sell to the ways they produce and deliver them.
Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane
Europe’s largest renewable natural gas station for HGVs opens in the UK
CNG Fuels has put into operation Europe’s largest refueling station offering low-carbon alternative to diesel for heavy transport in Warrington,
UK, which can refuel up to 800 HGVs daily and serve 12 vehicles simultaneously. This new facility, along with another one recently opened in Northampton, will be capable of refueling more than 1,000 trucks a day, doubling the 600-a-day capacity of existing natural gas stations at Leyland, and Crewe. According to CNG Fuels, demand for renewable natural gas has soared 800% since 2017 thanks to major trucking companies adopting alternative fuels, and is set to more than double this year.
The company plans to add another six to eight refueling points over the next 12 months as it expands its network of biomethane truck stations to meet growing demand. The company also reports it has helped haulers to save 55,000 tons of CO2 since it began supplying bio-CNG in 2017. This number is expected to rise to 90,000 tons by the end of 2020, as demand is set to soar thanks to major brands such as the John Lewis Partnership, parcel company Hermes and Home Bargains committing to moving away from diesel. The new CNG Fuels station in Warrington is located at Omega South on the M62 and caters to multiple major haulers in the area. The Northampton station is located at the Red Lion Truckstop off the M1 and can refuel more than 350 HGVs per day. The site is also part of the UK’s first large-scale study of how biomethane can help to reduce road transport emissions, supported by the Office for Low Emissions Vehicles in partnership with Innovate
European Parliament tests hydrogen-fueled Toyota Mirai to encourage green mobility
To further promote hydrogen technologies in European markets, a Toyota Mirai has been added to the European Parliament’s fleet for testing purposes.
Members of the European Parliament (MEP) will have the opportunity to be driven around in the Mirai in the Brussels area. Additionally, the Toyota hydrogen fuel cell car will be tested when MEP’s travel between Brussels and Strasbourg. By testing the Toyota Mirai, the European Parliament wants to support its call for zero-emission vehicles and respective alternative refueling infrastructure.
The interest in hydrogen is recently increasing as it becomes more evident that it has the potential to significantly contribute to CO2 reduction in the transport and other sectors where pure electrification has its limits. Fuel cell vehicles are relevant for intense usage and long-distance drives as required by the EU Parliament, emitting nothing but water. The car will be fueled at Air Liquide’s hydrogen station that was built on the grounds of Toyota’s Technical Centre in Zaventem and it will utilize the hydrogen station network of H2Mobility Germany when driving to Strasbourg. “It is of high importance to us that this technology can be experienced by as many people as possible. Therefore, we are proud to add a Toyota Mirai to the fleet of the European Parliament,” said Didier Stevens, Toyota Motor Europe Senior Manager European and Governmental Affairs.