NGS’ NG/LNG SNAPSHOT – APRIL 2020, VOLUME 1
National News Internatonal News
NATIONAL NEWS
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)
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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.
https://www.telegraphindia.com/india/national-green-tribunal-seeks-cng-report/cid/1754730
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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
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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.
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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.
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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.”
https://in.news.yahoo.com/first-cng-fuel-station-panchkula-065045841.html
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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)
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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.
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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.
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“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.
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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
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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.
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.Electric Mobility& Bio- Methane
NREDCAP & REIL signed MoU to set up charging stations at 32 places in AP
The Andhra Pradesh is to get Power charging stations for electric vehicles at 32 places. The state-owned New and
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These charging stations will have various options such as online booking of charging slots by the electric vehicles owners. There will be tie-ups with the network service providers to enable the advance remote. Recently, the power producer, Tata Power Company Ltd announced its plans to increase its network of electric vehicle charging stations to 700 by next year. At present the Tata Group Company is having 100 fast-charging stations across various cities like Delhi, Mumbai, Bengaluru, Pune and Hyderabad. It plans to add 200 more by the end of next month. Also a Bengaluru based EV Startup FAE Bikes announced the launch of its ‘Kirana Charzer’ which is a low-cost smart EV charging station which will just cost Rs 10,000. The small shops and individuals can install their own charging stations and earn some additional income out of it. let us see more about charging stations ‘Kirana Charzer.’ This development of EV charging infrastructure will definitely help the EV industry to develop more and more which results in zero emissions and breathing fresh air.
Source: electricvehicles
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NTPC invited tenders for operation of 90 e-buses in Bengaluru
The NTPC Vidyut Vyapar Nigam Limited (NVVN) has invited bids for the operation of 90 electric buses as a ‘Limited Tender’ bidding basis.
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The interested bidders must pay the Earnest Money Deposit of Rs 20 lakh along with their bids. It has issued three tenders which invited bids for eligible firms from the operation of 250 electric buses in three cities of Madhya Pradesh in November 2019. The project will be completed under the second phase of the ’Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) scheme. The other bids were invited for the operation of 50 buses for the city of Jabalpur and 100 buses for Bhopal and 100 buses for the city of Indore. Earlier, it has invited bidders to set up EV charging infrastructure with Bharat EV Chargers. It invited online bids from eligible bidders for the development of charging infrastructure package with Bharat EV Chargers (DC & AC). Eligible EV manufacturers will have an opportunity to work with Bharat EV Chargers. The scope of work includes the complete turnkey which are Supply, Packing and Forwarding, Transportation, Unloading, Storage, Installation and Commissioning including earthing, cabling all associated civil works which are related with the Bharat DC-001 and AC-001 Chargers for Electric Vehicles in specific locations.
Source: electricvehicles.in
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First batch of 150 electric buses to arrive in city
The Nashik Municipal Corporation (NMC) has decided to start the city bus service from May 1. It has plans to operate 400 buses through three private agencies.
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This includes 200 CNG buses, 50 diesel and 150 electric buses. “As these are the BS IV version of CNG buses, we have to conduct RTO registrations and fitness tests before March 31,” said RTO officials. 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.
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Gas/ Pipelines/ Company News
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’,
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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/
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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.
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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.
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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),
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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.
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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
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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.
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Policy Matters/ Gas Pricing/Others
Gas Price cut by 26 percent
Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC) said the bulk of India’s existing gas production will be priced at USD 2.39 per million
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British thermal unit for the six-month period beginning April 1, down from USD 3.23 as of now.
On Tuesday were cut by a steep 26 per cent to its lowest rate since the pricing was made formula-driven in 2014, a move that is likely to translate into lower CNG and piped cooking gas prices but also make a huge dent in revenues of producers as ONGC.
Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC) said the bulk of India’s existing gas production will be priced at USD 2.39 per million British thermal unit for the six-month period beginning April 1, down from USD 3.23 as of now.
This will be the second reduction in six months to the lowest since 2014. The price of gas produced from difficult fields such as deep sea too has been cut to USD 5.61 from USD 8.43 per mmBtu .
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Dip in natural gas price next month to benefit consumers, industries
Bills of natural gas consumers, be it residential or industrial, are set to get lighter with the benefit of lower gas prices expected to be passed on
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to consumers from April. Apart from individual consumers, reduced gas prices augur well for industries, gas-based power projects and city gas distribution (CGD) companies. Globally, natural gas prices have already plummeted due to the slump in demand consequent to the spread of the COVID-19 pandemic. The price of natural gas in spot markets have halved to around $3-4 per MMBtu, which is almost near its decadal low. Following global cues, the natural gas prices in India are estimated to be cut by a steep 25% from the next month. Based on the current formula for price determination, market estimates suggest that the domestic gas price is likely to be cut to US$ 2.5 per MMBtu for the six months beginning from April.
The gas price was last reduced by 12.5% to US$ 3.23 per MMBtu effective from October 1, 2019. At present, the state-run Gujarat Gas Ltd charges Rs 712.10 (excluding tax) per MMBtu for domestic PNG and Rs 54.70 per kg for CNG in Gujarat. Adani Gas Ltd’s retail price for residential PNG and CNG in Ahmedabad is Rs 686.85 per MMBtu (excluding tax) and Rs 54.82 per kg, respectively. Low natural gas price has brightened prospects for industrial production as well. Ceramics, chemicals and a host of other industries in the state use natural gas as fuel. “We are expecting a reduction of Rs 3-4 per cubic metre in gas price supplied to ceramic tile makers in Morbi as the LNG prices have declined globally,” said K G Kundariya, chairman, Wintel Ceramics Pvt Ltd. Morbi is the largest gas-consuming industrial cluster in India with daily consumption of approximately 60 lakh cubic meters of gas. The ceramic industry faced tough times over the last two years. The low gas prices in the international market and strong possibility of price reduction in the domestic market have provided a much-needed cushion to the industry.
According to CRISIL, the viability of Rs 50,000 crore capital expenditure planned in the CGD space over the next four years across India has improved with the price of liquefied natural gas (LNG) expected to be subdued during the period.
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Coronavirus: India to save $45 billion on oil imports next fiscal, says CII
With the spread of the Coronavirus denting global oil prices, India, that imports 80 per cent of its crude oil needs, is likely to save a whopping $45 billion
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on oil imports next financial year, according to Confederation of Indian Industry (CII). A $1 decline in the price of crude oil reduces the country’s import bill by $1.5 billion. “In 2020, international crude oil prices are expected to average $35 per barrel from $65 per barrel in 2019, a fall of about $30 per barrel. India is expected to save about $45 billion on oil imports for full year 2020-21,” the industry chamber said in a report.
The report on the State of the Economy and Coronavirus Impact also noted that the Union government has increased the excise duty and cess on both petrol and diesel cumulatively by Rs 3 per liter. “This will lead to an additional estimated revenue of Rs 40,000 crore for 2020-21. This will reduce Fiscal Deficit to GDP ratio by 0.2 per cent in 2020-21,” the report said. The rapidly spreading Covid-19 has derailed the global economy, increasing the chances of a global recession setting in, it said, adding India has already been facing growth deceleration, with GDP growth having fallen to 4.7 per cent in third quarter of 2019-20. The impact of COVID-19 is likely to pull it down further in the fourth quarter. GDP growth could slide to below 5.0 per cent in 2020-21 if policy action is not taken urgently. CII has recommended the government may consider a strong fiscal stimulus to the extent of 1 per cent of GDP amounting to Rs 2 lakh crores to be given in the hands of the needy citizens through Aadhar-based Direct Benefit Transfer.
Also, in order to improve market sentiments, the government may consider removing Long Term Capital Gains tax of 10% and fixing the total Dividend Distribution Tax at 25%. It has also suggested the RBI may consider relaxing the NPA recognition norms from 90 days to 180 days till September 30, 2020 to provide relief to the industry faced with payment issues as well as pressure on banks to classify loans as NPAs.
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IOCL started supplying this special fuel
Indian oil fuel producer Indian Oil Corp (IOC) has started supplying petrol and diesel in accordance with BS-VI emission standards.
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The country will adopt fuel with very low sulfur BS-VI standards from April 1, 2020. The IOC has started supplying more pure petrol-diesel at 28,000 petrol pumps two weeks before this deadline. IOC Chairman Sanjeev Singh said, “We have successfully started supplying BS-VI grade fuel across the country. Our 28,000 petrol pumps have been dispensing BS-6 standard fuel from the country for more than a week. Apart from this, other fuel companies Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) are also pro-actively supplying fuel based on BS-VI standards. For your information, let us tell you that the government has set an April deadline for the supply of fuel based on Euro-6 emission standards. With this, India has joined the league of select countries that are using low sulfur fuel. “We are entering BS-6 directly from BS-4 in three years,” Singh said.
He has described such a feat, which is not seen in any other big economy. Singh said that almost all refineries of the company had started producing petrol-diesel with very low sulfur by the end of 2019. He said that we have done this switchover without any hindrance.
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Gujarat: SGCCI seeks deferment of gas, power bill payments
The SGCCI has also made a representation to J N Singh, chairman of Gujarat Gas Ltd, to provide deferment from gas utility payments of industrial,
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commercial and residential purposes due to the lockdown in the state Surat: The Southern Gujarat Chamber of Commerce and Industry (SGCCI) has urged the state government for deferment of power utility and gas bill payments of the domestic, commercial and industrial purposes for the month of March and April due to the prevailing lockdown situation owing to the outbreak of CVOID-19 in South Gujarat region.
The SGCCI has also made a representation to J N Singh, chairman of Gujarat Gas Ltd, to provide deferment from gas utility payments of industrial, commercial and residential purposes due to the lockdown in the state. For both the utility payments, a request has been made to adjust the bills towards the usage of power and gas utilities during the months of March and April 2020 so that it can be collected post removal of the lockdown and declaration of normalization of condition and that it can be collected in nine equal monthly installments.
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India’s energy demand dips sharply as lockdown bites
India’s demand for petrol, diesel and jet fuel has declined by up to a third in the last five weeks, while power consumption dropped by
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a quarter as the coronavirus pandemic and the 21-day lockdown to check the infection from spreading brought almost all commercial and industrial activities to a grinding halt.But LPG demand recorded 4% growth during this period as families were confined to their homes due to the lockdown. On year-ago basis, the demand is higher by 6.5%.Latest data from grid operator POSOCO shows power consumption dropping to 2.59 billion units on Friday, the third day of the national lockdown. This is a level last seen on March 1, 2015, when India had 25% less generation capacity.Power consumption has fallen as the lockdown hit the largest chunk of demand — industry (41%), agriculture (18%) and commercial establishments (8%). Domestic consumption make up 33% of the demand, which is expected to rise over the next fortnight or so when families staying at home switch on air-conditioners as temperature rises.Chairman of India’s largest refiner and fuel retailer IndianOil, Sanjiv Singh said demand for petrol has fallen by 13.5% between February 20 and March 28, diesel 21%, jet fuel 27% because the lockdown curbed economic activities.
The lower demand for refined products has forced state-run oil refiners to taper crude processing and invoke ‘force majeure’ clause to put off oil shipments for April as they have run out of storage for crude and refined products. News agency Reuters last week reported liquefied natural gas importers too deferring cargoes under the same clause after demand shrivelled as the lockdown sent CNG vehicles off the road and shuttered industries.Oil minister Dharmendra Pradhan on Sunday explained the situation to his Saudi Arabian counterpart Abdulaziz bin Salman and Aramco CEO Amin Nasser through video-conference and requested additional LPG supply. The oil price crash also figured in the talks.India imports 55% of the 27.5 million tonne of LPG it consumes in a year and Saudi Arabia supplies some 200,000 tonne of the fuel every month. It is also India’s second-largest oil supplier, selling close to 2 million tonnes of crude very month.Singh, who continues to work in spite of losing his father two days back, told TOI the company has mapped the demand for April and all its crude and products are full. He said the oil companies have crude and product stocks to last 10-15 days. LPG stocks are good for 20-22 days and additional supplies were being tied up from Saudi Arabia, Qatar and UAE.
“The PSU oil companies hold enough stock of LPG to last 20-22 days. Crude and refined product stocks are good enough to last for 10-15 days. Please don’t panic. It stretches the system,” he said.“I expect LPG demand to rise further as people remain confined to their homes and free supply of refills to 8.3 crore poor households under Ujjwala scheme. We are tying up additional LPG shipments from Saudi Arabia, Qatar and UAE,” he said. India imports 55% of the 27.5 million tonne of LPG it consumes in a year and Saudi Arabia supplies some 200,000 tonne of the fuel every month.IndianOil has mapped the demand for April “as the period till mid-June is crucial for the farm sector.” “If the lockdown continues for longer, we will have to prepare for that. But whenever the demand comes, our tanks all over the country are full. Our personnel continue to man their stations hand in hand with associates. There will be no dearth of products anywhere,” Singh said.
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LNG Development and Shipping
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
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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
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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
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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.
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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.
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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.
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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
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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.
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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,
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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.
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US shale producers cut executive pay as oil prices crash
After laying off thousands of workers and sidelining equipment, US shale producers are moving to slash executive pay as they deal with a dramatic oil price collapse.
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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.
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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,
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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.
Total S.A.
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.
ExxonMobil
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.
BP
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.
ConocoPhillips
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.
Chevron Corporation
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.
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Global LNG Development
Shell exits proposed Lake Charles LNG project
Shell announced today it will not proceed with an equity interest in the proposed Lake Charles LNG project considering current market conditions.
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Energy Transfer will take over development of the Lake Charles LNG export project. Lake Charles LNG is a proposed 50/50 project between Shell and Energy Transfer with plans to convert Energy Transfer’s existing import terminal to an LNG export facility in Lake Charles, Louisiana. Energy Transfer will now take over the role of lead project developer and will continue the development of the project. Energy Transfer noted in a statement it will evaluate various alternatives to advance the project. The alternatives include bringing in one or more equity partners and reducing the size of the project from three trains (16.45 mtpa of LNG capacity) to two trains (11.0 MMTPA). “We continue to believe that Lake Charles is the most competitive and credible LNG project on the Gulf Coast,” said Tom Mason, Executive Vice President and President – LNG. “Having the ability to capitalize on our existing regasification infrastructure at Lake Charles provides a cost advantage over other proposed LNG projects on the Gulf Coast. The Lake Charles project also benefits from its unparalleled connectivity to Energy Transfer’s existing nationwide interstate and intrastate pipeline system that provides direct access to multiple natural gas basins in the U.S.” Energy Transfer and Shell signed a Project Framework Agreement in March 2019. Under that agreement the two companies would share the cost of developing the project. Shell has committed to support Energy Transfer with this process through the receipt of commercial EPC bids in the second quarter of 2020.
Shell will continue to support Energy Transfer during a transition period to facilitate Energy Transfer’s plans to continue the development of the project. “This decision is consistent with the initiatives we announced last week to preserve cash and reinforce the resilience of our business,” said Maarten Wetselaar, Director, Integrated Gas and New Energies, Shell. “Whilst we continue to believe in the long-term viability and advantages of the project, the time is not right for Shell to invest. Through the transition, we will work closely with Energy Transfer.” Shell announced last week the company is reducing its 2020 capital expenditure to $20 billion, or below, from a planned level of around $25 billion, in addition to an operating cost reduction of $3-4 billion over the next 12 months.
Source: LNG Global
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Global LNG-Asian prices crash below $3/mmBtu as Indians turn away cargoes
Asian spot liquefied natural gas (LNG) prices crashed below $3 per MMBtu reversing three weeks of gains, after Indian buyers cancelled
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or diverted cargoes as a lockdown caused gas demand to slump. The average LNG price for May delivery into northeast Asia LNG-AS was estimated at about $2.80 per MMBtu, down 70 cents, or 20% from the previous week, traders said. Prices for cargoes delivered in April were estimated around $3.00/MMBtu, also down 70 cents from a week ago. Indian LNG importers, including top buyer Petronet LNG, Gail (India) and Gujarat State Petroleum Corp (GSPC), issued force majeure notices to suppliers this week as domestic demand and port operations were hit by a nationwide lockdown to curb the spread of coronavirus, sources told Reuters. India’s GSPC also cancelled an import tender for 11 cargoes for deliveries in May to March, a company source said. The force majeure in turn has caused a flood of supply in the spot market, depressing prices, traders said. Qatargas has approached several buyers in Asia and Europe offering cargoes for loading or delivery in April, three sources familiar with the matter said. Two other traders said Qatar had offered about 10 cargoes, though this could not be confirmed.
Cheniere Energy also offered a cargo for early April loading from Sabine Pass, traders said. Sakhalin Energy and Petronas were offering cargoes for delivery in May, they added. Indonesia’s Bontang plant may have sold an early-May loading cargo to a Chinese buyer, one source said, though this could not immediately be confirmed. KUFPEC may have sold a cargo for first-half May loading from the Wheatstone plant to a portfolio company at $3 to $3.20 per MMBtu, the source added. One the buy side, some requirements were seen from China and Colombia. Thailand’s PTT bought two cargoes for delivery in May from Qatargas at $3.05 to $3.15 per MMBtu through a buy tender, traders said. Providing some upside, Woodside Petroleum, which produces LNG at North West Shelf LNG, Pluto LNG and has a stake in Wheatstone LNG in Western Australia, said on Friday its trading team has “recently begun placing some spot production back into China as industrial output and demand restarts”. It added that it would defer major maintenance at the North West Shelf LNG plant in Western Australia as it was slashing spending.
Source: LNG Global/Reuters
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PetroChina to seek price talks with gas suppliers as coronavirus hits
PetroChina, China’s top natural gas importer, will seek to renegotiate prices with global suppliers to control costs and curb losses at its gas import business,
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senior executives said on Thursday (Mar 26). The impact of the novel coronavirus has been devastating for energy prices as measures to contain it have destroyed demand, while supplies have swollen. Earlier this month, PetroChina canceled some gas contracts with suppliers – including of piped gas from central Asia and liquefied natural gas from Qatar and Australia. “Our gas import costs will trend lower with falling oil prices, but we’re not going to pin hope on that to cut losses,” Lin Xiao, a vice president at PetroChina, said during the group’s annual earnings briefing on Thursday.
“We’ll actively engage in price renegotiations…and keep optimizing the pace in imports and adjust the import volume where contracts allow.” PetroChina is also striving for a deal with China’s newly-established national pipeline group on the transfer of pipeline assets. Lin said no agreement had yet been reached. PetroChina, also China’s second-largest refiner, cut refinery operations significantly in February after China became the first country to suffer from the outbreak of the coronavirus. Chinese production has started to pick up this month as efforts to contain the virus succeeded, PetroChina said. But now the virus has spread to the rest of the world, energy companies across the world are reviewing costs. PetroChina said it would “dynamically optimize” and adjust spending this year from an earlier planned budget of 295 billion yuan ($41.66 billion). It did not give a new target.
The contrast with last year is stark. PetroChina raised spending to a near-record level of 297 billion yuan in response to Beijing’s call to boost domestic oil and gas supply security. So far this year, the company’s Hongkong-listed shares have fallen by 35%, compared with an 18% fall in the broader Heng Seng Index. PetroChina on Thursday reported a 13.9% fall in 2019 net profit at 45.68 billion yuan. Its natural gas import business recorded a 30.71 billion yuan net loss last year, 5.803 billion yuan deeper than the previous year’s loss because of slower demand growth at home and as import costs exceeded domestic rates. The state energy group said it expects to maintain steady domestic oil production and to speed up natural gas development, including new shale gas discoveries in the southwest Sichuan basin. Its total crude oil output rose 2.1% last year to 909 million barrels and gas increased by 8.3% to 3.91 trillion cubic feet.
Source: Reuters/LNG Global
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Qatar woos buyers with spot LNG after Indian importers cancel cargoes
Qatar Petroleum has made a rare approach to several buyers in Asia and Europe offering liquefied natural gas (LNG) cargoes in the spot market, three sources familiar with the matter told Reuters.
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The exact volumes offered by Qatar could not be confirmed, but the company has offered the cargoes for loading or delivery in April, depending on the location, the sources said. Two other traders said Qatar had offered about 10 cargoes. Qatar Petroleum did not immediately respond to a request for comment. Qatar is India’s biggest LNG supplier and Qatar Petroleum’s unit Qatargas is typically a long-term seller of LNG cargoes. Traders said it had likely been forced to seek buyers for its excess cargoes after being issued with a force majeure notice by India’s top gas importer Petronet LNG. A steep drop in gas demand in Europe due to lockdowns limiting industrial production is also forcing LNG suppliers like Qatar to find alternative buyers, traders said. LNG tanker Al Sahla, which was supposed to head to Hazira in India on April 1 after loading a cargo from Qatar, is lying idled at Ras Laffan anchorage, said Rebecca Chia, analyst with data intelligence firm Kpler. Qatar Petroleum recently sold two cargoes to Thailand’s PTT for delivery in May at about $3.05 to $3.15 per million British thermal units, traders said.
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Sempra to go ahead with Costa Azul LNG project amid virus concerns
Sempra Energy said on Tuesday (Mar 24) it will go forward with its plan to build the first phase of the Costa Azul liquefied natural gas (LNG) export plant
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in Mexico. Sempra said it is targeting a final investment decision in the second quarter of 2020. The decision comes at time when most of the LNG industry is cutting back on growth as global demand for gas is expected to decline due to the coronavirus outbreak. Last month, Sempra said it planned to make a final investment decision to build two LNG export plants in 2020 – Costa Azul in Baja California in the first quarter and Port Arthur in Texas in the third quarter. At Costa Azul, Sempra said Energia Costa Azul LNG has non-binding 20-year agreements with units of France’s Total SA as well as Japan’s Mitsui & Co and Tokyo Gas Co Ltd to buy about 0.8 MMTPA of LNG each. The first phase of Costa Azul is designed to have one liquefaction train that can produce about 2.4 MTPA or 0.32 billion cubic feet per day (bcfd) of natural gas. Sempra said Costa Azul could make its first LNG deliveries in 2023. The project will be built at the existing Costa Azul LNG import plant, which entered service in 2008 and has the capacity to regasify up to 1 bcfd. At Port Arthur, Sempra said Port Arthur LNG is in talks with units of Saudi Arabian Oil Co (Aramco) to buy 5 MMTPA of LNG and invest 25% equity, and with Polish Oil & Gas Co (PGNiG) to buy 2 MMTPA of LNG. The initial phase of the Port Arthur project is expected to include two liquefaction trains that can export about 11 MMTPA of LNG.
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LNG Recap: U.S. feed gas deliveries spike; Coronavirus weighs on European demand — bonus coverage
Enjoy this bonus coverage from NGI’s LNG Insight, which provides daily netback prices, export tracking, shipping costs, and other market-driven news and data. For a limited time, this service is free.
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Feed gas deliveries to U.S. liquefied natural gas (LNG) export terminals bounced back over the weekend, surpassing 9 Bcf/d and hitting their highest point in weeks. Foggy weather along parts of the Gulf Coast and periodic outages at both the Sabine Pass and Corpus Christi terminals in recent weeks have tested storage capacity and made it difficult at times for ships to load cargoes. While fog is still expected to be a factor through the end of the week, Genscape Inc. noted that pipeline shipments to terminals “rebounded with a vengeance” over the weekend and hit a 50-day high of 9.2 Bcf/d on Saturday. Volumes hit a 126-day low of 6.3 Bcf/d last week, Genscape said. NGI’s U.S. LNG Export Tracker showed that feed gas deliveries broke the 9 Bcf/d mark on Friday and remained consistent through Monday. As conditions improved, U.S. exports increased during the week ending March 18. Sixteen vessels departed carrying 59 Bcf, according to the Energy Information Administration. That’s up from 14 vessels that left in the prior week carrying 51 Bcf.
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Major European gas centres set for April demand destruction
Appetite to deliver LNG volumes into Europe could drop with limited space available in storage sites, and a weakening demand profile.
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Italy’s three LNG import terminals at Panigaglia, Rovigo, and Livorno are taking precautionary measures to protect LNG shipping operations against the coronavirus. Italy could see a year on year decline in imports as 348,000mt of LNG has arrived so far this month, 75% down on the total in March 2019. In northwest Europe, precautions have been taken at Gate LNG terminal in the Netherlands, as all workers have been told to work from home. European LNG imports have totalled 4.97m tonnes, month to date, LNG Edge data showed. In March 2019, 6.43m tonnes unloaded across terminals.
Source: LNG Global
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Virus starts to hit LNG
The COVID-19 pandemic and the global oil price crash will significantly impact Australia’s LNG industry in the coming months, according to EnergyQuest.
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The latest report from the energy analyst said although the impact of the virus on Australia’s LNG deliveries has so far been minimal, exporters will feel the impact of current market conditions on their revenue in Q2 2020. A breakdown in talks between Saudi Arabia and Russia earlier this month resulted in oil prices to fall as much as 30 per cent and the drop causing the price of oil-linked LNG cargoes to be 25–30 per cent cheaper. EnergyQuest said China and Japan, Australia’s two biggest LNG customers were expected to consume less gas as result of COVID-19 and cheaper contracts resulting from the oil price crash were unlikely to accelerate demand. Major oil and gas events across Australia have also been added to the list of virus cancellations, with the Australian Petroleum Production and Exploration Association Conference and the Australian Domestic Gas Outlook 2020 event both announcing last week they will not proceed as scheduled.
The West Australian is also reporting Chevron has put 20 staff in lockdown at its Barrow Island Gorgon facility in Western Australia as it awaits the results COVID-19 testing, although the facility is continuing to produce natural gas. EnergyQuest estimated Australia exported 6.1 MMT of LNG in February through a total of 90 cargoes, compared to 103 cargoes in January. Shipments on the west coast were partially impacted by Cyclone Damian in WA, as well as the temporary shutdown of Shell’s Prelude FLNG project. Japan received 31%t of Australia’s cargoes in February, followed by China with 29% and Korea with 12%. Projects on Australia’s west coast accounted for 4.254 Mt of the shipped LNG.
https://www.pipeliner.com.au/2020/03/16/virus-starts-to-hit-lng/
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LNG Recap: Coronavirus response wreaking havoc on European natural gas prices
A weak economic outlook and waning demand brought on by extreme efforts to halt the spread of the coronavirus across the continent have caused natural gas prices
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to spiral in Europe, a major destination for U.S. liquefied natural gas (LNG). The April Dutch Title Transfer Facility (TTF) contract fell nearly 6% on Monday to $2.867/MMBtu, while the UK’s National Balancing Point (NBP) lost more than 4% to finish at $2.812. TTF slid even more on Tuesday (Mar 17), settling at $2.736, while NBP plunged to $2.708. In Italy, which has been hardest hit by the virus and locked down since last week, gas demand for power generation has declined by nearly 20%, while industrial gas use has declined by almost 10% compared to the same time last year, according to French energy management firm Schneider Electric. Wood Mackenzie said Tuesday that power demand in the country has fallen by 8% from the previous week. “European gas generators will bear the brunt of demand loss where, despite low LNG prices, a carbon price decline bolstering coal and supply swings from variable renewables generation during the relatively productive spring period will be a significant determinant of gas demand,” Wood Mackenzie said. Demand is likely to sag further across the continent as more countries have announced lockdowns and other measures to better manage the spread of the virus.
The efforts come at a time when European natural gas storage inventories are high, LNG imports are up and prices already face downward pressure given the supply glut. As long as there’s a positive difference between the U.S. loading price, less variable costs such as shipping, and the foreign sale price of LNG, offtakers will move cargoes from the United States, even at just a few cents. But the virus presents another threat for global gas prices and already thin Gulf Coast netbacks. Henry Hub also came under pressure on Tuesday amid broader market turmoil and the prospect for U.S. demand destruction amid the outbreak, with the April contract falling 4.7% to settle at $1.729. The LNG sector has also had to navigate a collapse in oil prices over the last week. The slide has created both opportunities and hurdles for the super-chilled fuel. While projects with more exposure to oil prices could be delayed given crude’s steep decline, lower prices have made the fuel more competitive in some parts of the world, particularly for long-term buyers in Asia with crude-linked contracts that haven’t enjoyed the benefits of cheap gas on the spot market. In Asia, things have stabilized somewhat, with less floating storage near China, the epicenter of the outbreak, and more cargoes headed to the country. Prices are recovering there and have moved well above $3.00 both on the spot market and the forward curve. Europe was an even more important destination when the coronavirus broke out in China and nearby countries. Asia could play a similar role now that the virus is spreading in Europe.
If Europe-bound cargoes are eventually diverted, they’re all likely to end up in Asia, Kpler LNG analyst Nathalie Leconte told NGI late last week. For example, India, Bangladesh and Pakistan all have been opportunistic buyers as of late, taking advantage of historically low prices in the spot market. In any event, U.S. cargoes headed to Europe will be insulated by long-term contracts from any demand destruction. U.S. contracts also don’t include clauses restricting destinations, so spot cargoes can easily find a home elsewhere if netbacks continue to be positive.
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Coronavirus, gas slump put brakes on Exxon’s giant Mozambique LNG plan
Exxon Mobil is likely to delay the greenlighting of its $30 billion liquefied natural gas (LNG) project in Mozambique as the coronavirus disrupts
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early works and a depressed gas market makes investors wary, six sources told Reuters. Top U.S. oil and gas company Exxon said on Tuesday (Mar 17) it was evaluating “significant” cuts to capital spending and operating expenses. Energy firms worldwide have slashed spending this month as oil prices plummeted to 18-year lows after global travel curbs and reduced economic activity destroyed demand.
The coronavirus pandemic is forcing delays to projects worldwide. Qatar, the world’s largest producer of liquefied natural gas (LNG), is delaying a big expansion in which Exxon is a major partner. The Rovuma LNG project, which will produce from a deepwater block off Mozambique containing more than 85 trillion cubic feet of natural gas, was expected to get the go-ahead in the first half of 2020. But three sources familiar with the project told Reuters that Exxon’s partners want to push back a final investment decision (FID). A further three sources said the pandemic is disrupting work on the project to such a degree that FID before the second half is unlikely. Any delay would leave Exxon’s project further behind rival Total, which took FID last June on its neighboring project. Exxon might be left with no choice. The pandemic is causing delays to the financing needed for the project, the source added. Rovuma LNG is managed by Mozambique Rovuma Venture, a joint venture owned 35.7% each by Exxon and Eni with the remaining stake of 28.6% held by China National Petroleum Corporation (CNPC). LNG prices hit a record low of $2.7 per MMBtu last month, and Rovuma requires an average price of $7 per MMBtu throughout its life to be profitable, according to Bernstein analysts. Another source with knowledge of internal discussions said with the energy outlook uncertain and LNG supplies set to rise sharply by 2025, some of the project partners want to “cool Exxon’s heels” and delay. Exxon spokesman Todd Spitler declined to discuss whether partners are seeking to push back the FID. “This is a complex project that will be developed over several years,” he said. China’s CNPC did not respond to Reuters’ request for comment and Eni declined to comment. Mozambique’s state oil firm ENH, Galp Energia and KOGAS, which each have 10% stakes in the project, either did not provide a comment or referred Reuters to Exxon. Exxon has already committed to $500 million in initial investment, and FID is the next stage in funding based on which banks can extend lines of credit. But early works are being disrupted by coronavirus travel restrictions.
International workers travel regularly to the project site on the Afungi peninsula in Cabo Delgado province, where they live cheek-by-jowl and share a canteen for six- or eight-week stints. Many hail from countries that have been hit hard by the coronavirus and have put in place travel restrictions. Mozambique has imposed a 14-day quarantine for those entering the country. That has left key personnel unable to reach the site. “It seems as though they are electing to postpone some of the early stage works and contracts for now,” another source familiar with the matter said. “I doubt we can expect their FID before the end of 2020.” Exxon’s Spitler said employees’ health and safety was a priority and declined to comment on the day-to-day details of its operations.
Source: LNG Global/Reuters
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Natural Gas / LNG Utilization
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.
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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.
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Agility awarded CNG fuel storage systems order
Agility Fuel Solutions, a business of Hexagon Composites, has been awarded an order from an existing U.S.-based transit bus customer to deliver
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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.
https://ngtnews.com/agility-fuel-awarded-cng-fuel-storage-systems-order
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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. “
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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.
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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
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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.
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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
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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.
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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,
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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.
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LNG as a Marine Fuel/Shipping
Japanese & Canadian ports partner to promote LNG as marine fuel
On March 5, a memorandum of understanding (MOU) was signed between the Vancouver Fraser Port Authority and the Tomakomai Port Authority
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to promote the use of natural gas as a marine fuel and the provision of LNG bunkering services at the Port of Vancouver and Port of Tomakomai. The supply of LNG fuel for ships transiting between both ports will reduce air emissions from shipping, protecting air quality in port communities, while also reducing contributions to global climate change. The Port of Vancouver and the Port of Tomakomai will actively exchange information and expertise on LNG bunkering, including technical procedures and best practices, and where feasible, coordinate port requirements and guidelines for LNG bunkering to facilitate its use in both ports. The development of LNG bunkering services in the ports Vancouver and Tomakomai will enable adoption of LNG as a marine fuel by ships engaged in trans-Pacific trade.
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LNG as marine fuel video – The first step towards deep-sea shipping GHG reduction
The Society for Gas as a Marine Fuel (SGMF) has released a video explaining why Liquified Natural Gas (LNG) is currently the only viable solution available
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that can cut emissions from deep-sea shipping as newer, cleaner options are developed. The video describes how LNG can provide a clear pathway to fuels that will enable the industry to meet the International Maritime Organization’s target to reduce greenhouse gas (GHG) emissions by at least 50% by 2050. The disruption being caused by the COVID19 pandemic highlights the crucial role of shipping in enabling global trade, with governments working to safeguard supply chains for essential goods. Given this fundamental role in trade, reducing emissions from shipping is critical. Shipping currently represents around 3% of total global emissions. That contribution could change significantly as other sectors switch to renewables if the shipping fuel mix remains unchanged.
SGMF Emissions fact sheet
Mark Bell, General Manager for SGMF said; “We produced this video as there is still a lot of debate around the use of LNG and its role in achieving the 2050 targets, and eventual zero-carbon emissions in shipping. We are not here to tell anyone what to do but we are here to lay out the facts regarding the use of LNG. Be quite clear that the fuel choice is only part of the solution but without its widespread use or the delay of that use, 2050 targets will not be met. Net zero carbon fuels are not yet available for shipping and could be some way off, LNG is a both a pathway to those fuels whilst also providing benefits now”.
“With a changeover to LNG today we can reduce GHG emissions by up to 21% compared with current oil-based marine fuels over the entire lifecycle from well to wake*. We want to help the industry understand that it is more attainable then people may believe to have a significant and immediate impact on emissions.”
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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,
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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
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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.
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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.
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