NGS’ NG/LNG SNAPSHOT – January 16-31, 2022
City Gas Distribution & Auto LPG
Indian Oil Corporation to invest Rs 7,000 crore
Indian Oil Corporation (IOC) announced on Jan 16, it will invest over Rs 7,000 crore in setting up city gas distribution networks in the cities for which it has secured a licence in the latest bidding round. IOC secured 33 per cent of the demand potential
that was up for grabs in the recently concluded 11th round of CGD bidding, cornering cities from Jammu to Madurai to Haldia.
In the 11th round city gas distribution (CGD) bidding, IOC got nine licenses to retail CNG to automobiles and piped cooking gas to households. Though the GAs it won were less than Megha Engineering and Infrastructures Ltd’s 15 licences and Adani Total Gas Ltd’s 14, in terms of demand potential it got the maximum. IOC acquired GAs include major districts like Jammu, Pathankot, Sikar, Jalgaon, Guntur (Amravati), Tuticorin, Tirunelveli, Kanyakumari, Madurai, Dharmapuri and Haldia (East Midnapore).
These districts contain high demand customers across the industry-commercial-domestic spectrum for PNG (piped natural gas) and CNG (compressed natural gas)
BPCL to invest ₹10,000 crore in six new city gas networks
Bharat Petroleum Corporation Limited (BPCL) on Tuesday said it will invest ₹10,000 crore over t or GAs bid out in the latest 11th bidding round of PNGRB. The next five years in setting up city gas distribution networks in the cities for which
it secured licences in the latest bidding round. BPCL won licences to retail CNG to automobiles and supply piped natural gas for cooking purposes in six geographical areas
BPCL had won six GAs in 19 districts for setting up City Gas Distribution (CGD) networks, in the 11th bidding round of Petroleum and Natural Gas Regulatory (PNGRB). The CGD footprints of BPCL, along with its JVs, will now extend to 48 GAs covering 94 districts in 18 states, across India. Currently, with presence in 63 districts, including prominent cities, BPCL along with its JVs together hold 33% market share in the CGD sector in the country. BPCL had city gas licence for 38 GAs prior to winning six in the latest bid round.
Adani Total Gas wins 14 out of 52 city gas licences, Indian Oil Corp 8
A joint venture of billionaire Gautam Adani-run group’s gas arm and Total of France on Friday walked away with the most 14 licenses to retail CNG to automobiles and piped cooking gas to households in the latest city gas bidding round,
according to oil regulator PNGRB. Adani Total Gas Ltd won city gas rights in 14 out of the 52 geographical areas (GAs) for which Petroleum and Natural Gas Regulatory Board (PNGRB) declared results on Friday, Jan 28.
The results of the remaining 9 GAs have been withheld due to the model code of conduct being in place in Uttar Pradesh and Uttrakhand for assembly elections. The hotly contested GA of Nagpur went to a consortium that included HCG (KCE) Pvt Ltd and Haryana City Gas.
Adani Total won three GAs each in Assam and Chhattisgarh, four in Maharashtra including Amravati, one each in Jharkhand and Odisha and two in Madhya Pradesh.
High LNG prices may impact India’s climate goals, gas distribution targets-Business Journal
India awarded 61 areas under the 11th city gas distribution (CGD) round that will, when it is complete, extend coverage to 88 per cent of the country’s land area and 98 per cent of households.
This is a remarkable achievement considering that five years ago city gas networks covered only 11% of the country’s area and 19% of the population. But the timing coincides with another statistic, the irony of which is not lost on city gas companies or the government — India’s LNG imports declined for the first time since 2013. Import of the fuel declined
Policy Matters/ Gas Pricing/ Others
Govt to permit retrofitting of CNG kit in petrol cars soon
The road transport ministry on Thursday, Jan 27, issued a draft notification for setting the emission and other norms for such retrofitment. Officials said the demand was felt for some time as currently only vehicles complying with the BS-VI emission norms are being sold across the country.
As of now vehicles which meet the emission norms of up to BS-IV are allowed for CNG retrofitment.
The ministry, in the draft notification, has said this will be allowed for vehicles that have gross vehicle weight (GVW) of up to 3.5 tonnes and the type approvals for vehicles retrofitted with CNG kits will be valid for three years and such approval will be renewed for every three years at a time.
Industry sources said the retrofitment of CNG in such vehicles kits could be around Rs 50,000 per vehicle, but the owners will recover the account quickly due to saving from fuel cost.
130% hike in natural gas price seen in H1FY23, to stoke inflation
The rise in international gas prices coincided with substantial jump in domestic gas production, helping in cutting import dependency of natural gas from 55% in April-November, 2020 to 47% in the corresponding period in 2021.
The city gas distribution (CGD) sector — the second-largest natural gas consumer in the country — gets cheaper domestic gas under administered price mechanism (APM) for the domestic PNG and CNG categories. For some extremely price sensitive user industries like the power sector, landed price of more than $6-8 per mbtu makes it unsustainable to continue operations.
On the back of rising global crude oil and natural gas rates, analysts expect the price of domestic gas to increase by a sharp 128% for the April-September period of the next financial year. This could inflate CNG prices and make piped natural gas costlier for households, hotels and restaurants. Power and fertiliser companies, which use gas as fuel and feedstock respectively, may also feel the pinch.
Domestic gas is the feedstock for compressed natural gas (CNG) and residential piped natural gas (PNG) and constitutes around 85% of gas sourcing for Indraprastha Gas and Mahanagar Gas, and about 15% for Gujarat Gas. Large hikes are seen to be required in CNG prices to pass through the rise in gas costs.
Petroleum Body Seeks Natural Gas under GST Ambit
The petroleum industry in the country has urged the government to bring natural gas under the ambit of Goods and Services Tax (GST) regime to realise the goal for a gas-based economy and raising its share in India’s energy basket.
Natural gas is currently outside the ambit of GST, and existing taxes like central excise duty, state VAT and central sales tax continue to be applicable on the fuel.
In its pre-budget memorandum to the finance ministry, Federation of Indian Petroleum Industry (FIPI), also demanded rationalisation of GST on transportation of natural gas through pipeline as well as on re-gasification of imported LNG to help bring down cost of the environment-friendly fuel.
Government has set a target of raising the share of natural gas in the country’s primary energy basket to 15 per cent by 2030, from 6.2 per cent currently. Greater use of natural gas will cut fuel cost as well as bring down carbon emissions, helping the nation meet its COP-26 commitments.
Electric Mobility/ Hydrogen/ Bio- Methane
Doorstep services provider Humsafar to enter EV space
Humsafar India, an app-based doorstep diesel services provider, is all set to make a foray into the growing Electric Vehicle (EV)-charging and battery replacement business and plans to set up its first charging stations in Delhi and Noida.
The company plans to set up charging stations across Delhi-NCR and other cities in the country and is in talks with oil marketing companies (OMCs) to set up EV stations in urban areas, starting from Delhi.
At present, Humsafar, which has tied up with OMCs–Oil India and BPCL–has set up doorstep diesel delivery service in 50 cities across 20 states. The company said it plans to make a foray into other states and cities soon. With different parts of the country witnessing a steady increase towards EVs, the demand for ancillary units and charging stations is expected to rise manifold. EVs will require investing in infrastructure, possibly repurposing the existing network of fuel stations, building up the ecosystem of partners and stakeholders, including governmental policymakers, energy generation agencies, OEMs and mobility solutions providers, said Nishit Goel, Founder Director of Humsafar India.
Delhi mandates EV adoption for online cab, fleet aggregators in draft scheme
The Delhi government has issued a draft Motor Vehicle Aggregators Scheme, 2021, which has called on online passenger and commercial vehicle operators to increasingly adopt electric vehicles (EVs). Alongside laying down a proposed timeline for adding more electric vehicles to their fleet,
the draft scheme has also proposed a continuous driver assessment to boost safety of services in the national capital.
According to the draft scheme, electrification targets will apply only for new cars being brought under the ambit of operators such as Uber, Olacabs and others. Older vehicles already registered under these aggregators will, for the time being, continue operating.
For new fleet additions, the two- and three-wheeler sectors will need at least 10% to be EVs within six months of obtaining an aggregator licence from the Delhi government. Within one year, 25% of all new fleet additions are required to comprise EVs, and within two years, this must rise up to 50%.
The scheme also lays down penalties for aggregators operating in Delhi, if they fail to meet any of the mentioned targets.
Ambani eyes $3 billion equity raise for green power
Reliance Industries Ltd has initiated talks with global investors to raise as much as $3 billion in equity to fuel its ambitious plans for the renewable energy business. This month, it proposed ₹5 trillion over 15 years for a 100GW renewable energy plant and green hydrogen eco-system development in Gujarat.
The discussions are at a preliminary stage, and the billionaire Mukesh Ambani-controlled refining-to-retail conglomerate has so far reached out to a select group of potential investors, including a large pension fund and a few sovereign wealth funds based in the Middle East, the people said requesting anonymity as the talks are private.
Reliance Industries, which currently generates more than half of its revenues from refining and petrochemicals, is building the Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres in Jamnagar, Gujarat. Reliance Industries’ plans echo those of other global oil firms such as Royal Dutch Shell, Eni Spa and BP Plc, who have pledged to turn net-zero carbon amid pressure from investors and green activists. Last December, Reliance Industries took a $736 million equivalent green loan from five banks to fund its acquisition of REC Solar, marking its first such financing. https://www.livemint.com/companies/rils-new-energy-biz-to-raise-up-to-3-bn-11643049859502.html
Natural Gas / Transnational Pipelines/ Others
Daily output of natural gas in China’s largest oil-and-gas field sets new record
The daily production of natural gas in Changqing Oilfield, China’s largest oil-and-gas field, has reached more than 150 million cubic meters, accounting for one-seventh of the country’s total daily use of natural gas during the peak of winter. The amount can meet the daily cooking gas needs of 300 million families of three persons.
Located in northwest China’s Erdos basin, the oilfield produced more than 46.5 billion cubic meters of natural gas last year, accounting for 23% of the country’s total. It provides natural gas for civil uses of nearly 400 million people in over 40 cities. With over 50 years of history, the oilfield has played an important role in safeguarding the country’s energy security.
The oilfield is also contributing to China’s ongoing efforts to replace coal with clean energy sources such as natural gas. China has promised to peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060.
Turkey: First batch of pipes for Black Sea natural gas pipeline arrive
Turkey has started delivering the pipes that will be used for the pipeline beneath the Black Sea to bring onshore the natural gas that the nation discovered in the region, the country’s energy and natural resources minister said.
The first batch delivered to the onshore natural gas processing facility at Filyos port in the northern Black Sea province of Zonguldak constitutes 20% of the seabed pipeline that will stretch around 170 kilometers (105.6 miles).
Scheduled to be constructed this year, the pipeline will connect the wells in the region to the main grid. Pipes are scheduled to be brought to the port in 10 separate shipments, which are expected to continue through June this year. Ankara aims to start pumping the gas to the national grid in 2023, the centennial of the founding of modern Turkey, with sustained plateau production starting in 2027-2028. The first phase is expected to see some 10 million cubic meters (mcm) of gas being delivered per day.
China-Russia pipeline delivers 15b cubic meters of natural gas
The world’s longest pipeline, the China-Russia east route natural gas pipeline, has transported over 15 billion cubic meters of Russian gas to China as of January 17, 2022. Established in late 2019, the pipeline spans more than 8,000 kilometers.
UK: DHL Supply Chain plans to have over 500 natural gas trucks by 2025
DHL Supply Chain announced the addition of 13 new Volvo FH LNG 6×2 tractor units to its fleet as part of its GoGreen plan and commitment to finding innovative solutions to reduce its environmental impact.
The new trucks, which are joining the company’s growing fleet of NGVs, are equipped with Globetrotter cabs and specified with 155kg LNG tanks for maximum range of 1,000km. They will deliver up to 80% reduction in carbon emissions when fueled with bio-LNG and 10-20% with fossil gas.
The new FH LNGs use small amounts of diesel to initiate ignition of the air-fuel mixture. This enables the Volvo G13C engine to deliver the same 460 hp and 2,300 Nm of torque as its diesel-only counterpart, with matching drivability, reliability, and service intervals.
Global LNG Development
Spain: Port of Cartagena invests in LNG bunkering infrastructure
The Salamanca, the latest incorporation of the shipping company Brittany Ferries, made a stopover at the Port of Cartagena to refuel 500 m3 of LNG, supplied by Repsol through the Enagás regasification plant, at Front E003 of the Principe Felipe wharf.
For this reason, the port of Cartagena is making a significant investment to adapt and expand the Principe Felipe wharf in the Escombreras dock for LNG bunkering, with a budget of 9.7 million euros and which will be completed in a few months. The Salamanca, with 212 meters in length, 77,000 deadweight tons and a capacity for 2.7 kilometers of vehicles and 1,015 passengers in 341 cabins, is Brittany Ferries’ first ship to run on LNG. The vessel will join the company’s fleet in the spring for the connection between Spain and the United Kingdom. Specifically, she will travel 10,322 nautical miles (19,166 kilometers)
In recent years, the port has increased the transport of LNG, exceeding figures of more than 2.6 million tons in 2021, 14% more than in 2020.
USA: Calcasieu Pass in Louisiana nearing start of LNG production
U.S. LNG project developer Venture Global LNG is nearing production of the first amount of liquified natural gas at its new Calcasieu Pass export facility in Louisiana.
Venture Global is developing an LNG export facility in Cameron Parish, Louisiana, south of the city of Lake Charles. The project site is at a location that features deep-water access, proximity to gas supplies, and ease of transport for buyers. Once complete, the facility will export 10 million tonnes per year (mtpa) of LNG. The amount of gas flowing to Calcasieu rose to 88 million cubic feet per day (mmcfd) on 21 January; from an average of about 38 mmcfd during the prior week.
In December, Venture Global and the Louisiana goverment announced the company will invest more than $10 billion to develop Calcasieu Pass 2 (CP2) LNG, a fourth LNG export facility in Louisiana. It will build, own and operate an LNG terminal with a liquefaction capacity of 20 mpta of LNG. Furthermore, the company signed a sales and purchase agreement with China’s CNOOC. Under this, China will buy 1.5 million tonnes of LNG from the Calcasieu Pass facility.
Greece turning into gas hub
Greece will add two more liquefied natural gas terminals for storage and gasification, thereby strengthening its gas supply security and obtaining a strong role in transit by making the most of its strategic location and
its new corridors for the supply of Europe and the Balkans. Greek energy groups want to make the most of the opportunity of gas being the bridge fuel on the way to clean energy, and of Balkan countries’ need to diversify their sources and not be so reliant on Gazprom. They have therefore designed and are promoting infrastructure for their entry into the Greek LNG system.
The LNG terminal project at Alexandroupoli is close to the sealing of the investment decision. Budgeted at 363.7 million euros, the project consists of a floating platform for the reception, temporary storage and gasification of LNG, and an underwater and land pipeline for the fuel to reach the national transmission system. The unit will have a storage capacity of 210,000 cubic meters, and a gasification capacity of 132,000 MWhs per day, with the average annual demand estimated at 2.5 billion cubic meters. Its completion will increase the Greek gas system’s storage capacity by 80%, boosting Greece’s supply security.
France: Elengy signs commercial deals on french LNG storage
French LNG company Elengy said on January 27 it had signed the first commercial agreements on storing LNG at a planned facility in Reichstett in northeast France.
The LNG terminal operator signed a memorandum on developing the storage facility with French storage specialist Rubis in 2019. The project will help cover retail demand for LNG in the industrial and transport sectors in west-central Europe, Elengy said. Its location is ideal for providing LNG access across southeast France, south Germany and neighbouring areas. The storage terminal will be supplied by LNG via rail from Elengy’s Fos Sur Mer import terminal.
Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane
Gen X Energy and ACE Enexor Agree to Jointly Develop LNG and Green Hydrogen Fueled Power Plant in the Philippines
Gen X Energy enters into a joint venture with ACE Enexor Inc., a subsidiary of AC Energy Corp., to develop Batangas Clean Energy, Inc.’s (“BCE”) 1,100 MW combined cycle power plant project.
The project will be capable of using natural gas and green hydrogen as its fuel to provide firm power to the grid to meet the Philippines’ growing energy demand and reduce the country’s reliance on coal fired power generation. The joint venture will result in Gen X Energy and ACE Enexor each holding a 50% interest in BCE.
The project will be strategically located in the Batangas Bay Area of the Philippines, close to the load center of Metro Manila. Gen X Energy will continue holding a 50% interest in BCE through its wholly owned subsidiary Red Holdings B.V.
Gasnam, Europe: 64 operational biomethane plants projected in Spain by 2024
In Europe, the number of biomethane plants has grown by 17% in just one year, reaching a total of 992 plants, of which 306 belong to France and 242 to Germany, according to figures from the European Biogas Association (EBA).
Despite Spain’s obvious delay compared to European countries, there is a clear commitment by companies to the development of this green energy.
According to the information available on the GASNAM website, before the end of 2022, there will be 12 biomethane plants in operation in Spain and another 30 will be under development. Moreover, the forecasts for 2024 show 64 biomethane plants in operation, which will generate a total capacity of 2,077 GWh/year compared to the current 162 GWh/year.
Germany: World’s first full-scale pilot plant for extracting hydrogen from natural gas pipeline
Germany-based Linde Engineering has started up a full-scale pilot plant in Dormagen to showcase how hydrogen can be separated from natural gas streams using its membrane technology.
Furthermore, Abu Dhabi-based renewable energy developer Masdar has teamed up with French energy giants Engie and Totalenergies on two separate hydrogen projects and Sweden’s nuclear power company OKG signed its first contract with an external buyer to enter the hydrogen market as a producer and supplier.
Germany’s Linde Engineering has started up a full-scale pilot plant in Dormagen to showcase how hydrogen can be separated from natural gas streams using its membrane technology. Germany’s Center for Solar Energy and Hydrogen Research Baden-Württemberg (ZSW) and Ecoclean announced that their EcoLyzer BW project started in January.
USA: Chevron & Brightmark launch their first biomethane project in California
Brightmark RNG Holdings LLC – a joint venture partnership between Chevron U.S.A. Inc. and Brightmark Fund Holdings LLC, a subsidiary of the global waste solutions provider Brightmark LLC –announced plans to construct an anaerobic digestion project at Vlot Calf Ranch in Chowchilla, California, expected to be completed in 2023.
The Vlot project is anticipated to capture, clean, and convert methane from manure that would otherwise escape to the atmosphere on the Vlot Calf Ranch and dairy farm into renewable natural gas. When used in the transportation sector, biomethane from dairy operations has a negative carbon intensity on a lifecycle basis under California’s Low Carbon Fuel Standard. The Vlot Project is Brightmark RNG Holdings LLC’s first renewable natural gas project in the state of California.