NGS’ NG/LNG SNAPSHOT – JANUARY 2020, VOLUME 2

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City Gas Distribution & Auto LPG

Agility Fuel Solutions makes history in India with long distance CNG buses

Dharmendra Pradhan, India’s minister for petroleum and natural gas, launched India’s first long distance CNG bus on December 24, 2019, under a strategic program led by Indraprastha Gas Limited (IGL), the largest CNG distribution company in India. 

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The composite cylinder-based complete bus fuel system designed, engineered, assembled and delivered by Agility Fuel Solutions, along with its Indian partner Advantek Fuel Systems, more than doubles the range of India’s CNG buses and is also equipped with a special fast filling module to reduce filling time. While CNG buses in India previously traveled 350 kms at best, the program’s five buses with Agility’s technology each have a range of over 1100 kms – a first in India’s automotive history. With BS VI Emissions Standards going into effect on 1 April 2020, IGL’s program begins a shift away from diesel, which previously accounted for 100% of intercity travel, towards a gas-based economy. Buses outfitted with Agility Fuel Solutions’ roof top CNG systems not only allow fleet owners to achieve BS VI easily, but allow them to do so in a cost-effective manner, since CNG costs less than diesel. At 1360 liters total, Agility’s four tanks nearly double the 720-liter capacity of India’s current CNG bus systems. At the same time, India’s current systems have a weight of around 1100 kgs, which will reduce drastically to 490 kgs using Agility’s systems. Fleet operators thus get more than double the range at less than half the weight. Additionally, CNG costs on average about 20-25% less than diesel. IGL’s pilot program leads the way for fleet owners to save money on long distance travel, even while complying with BS VI. Delhi is one of four cities implementing new CNG technology under the encouragement of GAIL. Together, city gas companies in Delhi, Mumbai, Pune and Bengaluru are also planning to demonstrate how long distance CNG buses can become common in India.

https://www.renewableenergymagazine.com/biofuels/agility-fuel-solutions-makes-history-in-india-20200113

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L&T Infrastructure Finance to lend Rs518 crore to AG&P India

L&T Infrastructure Finance has signed an agreement to provide ₹518 crore as term loan to Singapore-based AG&P Group’s Indian subsidiary for developing city gas distribution (CGD) networks in Jodhpur, Barmer, Jaisalmer in Rajashtan and

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Ramanathapuram in Tamil Nadu, the company said today. Petroleum Natural Gas and Regulatory Board had under the ninth and tenth bidding rounds for CGD licenses awarded 12 geographical areas (GAs) to AG&P CGD India. “AG&P holds the exclusive licenses to build CGD networks to sell natural gas in these two Geographic Areas in addition to ten other GAs across India. These networks are being developed to connect millions of people to CNG for their vehicles and piped natural gas (PNG) for their homes and businesses. The 12 areas cover 28 districts in Andhra Pradesh, Karnataka, Kerala, Rajasthan, and Tamil Nadu. The company intends to build over 1,500 CNG stations, supported by 1,800 kilometers of steel pipelines. “In these areas, this will be the first time these people have access to natural gas,” said Abhilesh Gupta, chief financial officer and commercial head, AG&P Group, in a statement. Deloitte India Corporate Finance and Restructuring Services was the financial adviser to the deal.

https://www.livemint.com/companies/news/l-t-infrastructure-finance-to-lend-rs518-crore-to-ag-p-india-11578479487015.html

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CNG car price could drop by 23% in India

In a related development, the oil ministry of the country has proposed a reduction in the Goods and Service Tax (GST) on vehicles powered by CNG to just 5%. The recent recommendation is in line with the Government’s aim to give a boost to the popularity of CNG-powered vehicles,

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thereby reducing the number of petrol and diesel vehicles on the road. In case the GST on CNG-powered vehicles actually goes down to just 5%, we can see a drop in prices of CNG vehicles by more than 20%. This would, in turn, boost the popularity of vehicles powered by this cleaner fuel. The ministry is said to be hoping for support by the finance ministry to follow the latest recommendation. Thus we can expect a sizeable drop in the tailpipe emissions in case the proposal is accepted. Currently, all vehicles except electric-powered models attract a GST of 28%. In July last year, the GST on EVs was cut down from 12% to 5%. A similar cut on the taxation on CNG vehicles can work in favour of the models powered by the CNG. So far, the Government of India has been very aggressive on its plans of earlier adoption of electric vehicles. However, with the required EV structure being in nascent stages, CNG models could help in the reduction of tailpipe emissions until the zero-emission vehicles become popular. In tune with this, Maruti Suzuki India Ltd (MSIL), is said to be working on launching CNG variants of some of its popular cars. The company has already discontinued the production of diesel variants of its small cars and will be seen continuing only with petrol and CNG variants.

https://gaadiwaadi.com/cng-cars-price-could-dropped-by-23-in-india-details/

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Jalandhar city gets first CNG station

Deputy Commissioner Varinder Kumar Sharma on Thursday (Jan 2) inaugurated the first CNG station of Think Gas on the Jalandhar-Nakodar road where cheap CNG would be available to the consumers at Rs 68.50 per kg.

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The Deputy Commissioner dedicated the gas station set up by the Think Gas in collaboration with Indian Oil Corporation at Kunwar Petro World on the Jalandhar-Nakodar road. He said it was a step towards ensuring cheap and efficient fuel to consumers. He said this would go a long way in checking the environment pollution on one hand and ensuring availability of cheap fuel to the consumers on the other hand. He said the introduction of this mode of fuel would benefit the people by providing them fuel in smooth and hassle free manner. Sharma said that this was the need of the hour for saving the environment of the city and facilitating the residents in a big way. On the occasion, District Food and Supply Controller Narinder Singh, Director Lovely Group Aman Mittal, manager Think Gas Sachin Jaiswal, among others were present.

https://www.tribuneindia.com/news/city-gets-first-cng-station-20798

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Higher volumes, margins to fuel growth for gas-distribution firms

The Street’s confidence on city gas distributors (CGD) remains high, considering the firm demand for gas, rising volumes, and future growth potential. The Gujarat Gas stock surged over 7 per cent and scaled its all-time high on Wednesday (Jan 1).

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At the same time, the stock of Indraprastha Gas (IGL) is also close to its peak, while that of Mahanagar Gas (MGL) is trading at around its 22-month high. The Street’s confidence on city gas distributors (CGD) remains high, considering the firm demand for gas, rising volumes, and future growth potential. All three companies have received upgrades by foreign brokerages. With lower natural gas prices (global prices down over 20 per cent in two months), their profitability, too, will continue to improve. The CGD companies have already outperformed their upstream and downstream oil and gas peers, driven by strong volume-led earnings growth, and margin expansion during the September quarter (Q2). The CGD companies saw improvement in margins of 153-460 basis points in the September quarter year-on-year, while volumes grew up to 40% year-on-year, with Gujarat Gas leading the pack. Not surprising then, that their profits rose 25-125% year-on-year in Q2. The forward outlook remains strong, say analysts. Volume growth is expected to be healthy, led by increased availability of natural gas, as well as rising demand for CNG by automobiles, PNG (piped natural gas) for household and industrial use, more so in the back of pollution control measures. This, coupled with the allocation of cheap domestic gas (for CNG and domestic PNG use) and low LNG prices, will help CGD companies to sustain high Ebitda margins, says Abhijeet Bora of Sharekhan.

IGL, led by growth in the national capital region (NCR), use of CNG for inter-city travel, increased conversion to CNG on account of BS-VI implementation, and contribution from newer geographies, is seen reporting good growth, which analysts at Motilal Oswal peg at 10-11%. The higher volume growth for Gujarat Gas is seen driven by strong industrial sector demand and supplies. For FY20 and FY21, analysts at IIFL expect Gujarat Gas to register 44 and 15% year-on-year volume growth. This is due to sustained off-take from the Morbi cluster (given the ban on coal usage); growth in sales to other smaller industrial units upon expansion of its network and higher off-take from existing players; and stable growth in CNG and domestic PNG sales. Though MGL may not have won new geographical areas, the management has, nevertheless, guided for 5-6% volume growth. Rising CNG and PNG demand in Mumbai and pipeline expansions in Maharashtra are likely to drive growth. For MGL, the overhang of stake sale is also over with Shell India having already sold its stake. As volume growth remains firm, the soft natural gas prices continue driving operating performance and profits for these companies. Foreign brokerages have also upgraded earnings for Gujarat Gas by 13-15% and for MGL by 7-11% for FY20 and FY21. IGL, too, is amongst top mid-cap picks of some foreign brokerages.

https://www.business-standard.com/article/companies/higher-volumes-margins-to-fuel-growth-for-gas-distribution-firms-120010200004_1.html

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Oil ministry wants cut in GST on CNG vehicles to 5%

Currently, CNG vehicles in India are taxed with 28% GST. The oil ministry has proposed reducing the goods and services tax on compressed natural gas (CNG)-driven vehicles to 5% at par with electric vehicles from the current 28% to help the government’s drive to popularise gas vehicles in the country.

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The ministry is seeking support from the finance ministry to cut GST rate on CNG vehicles to make them more affordable, people aware of the development told ET. Natural gas emits 25% less Co2 than petrol on every unit of energy produced. The government aims to raise the share of natural gas in country’s primary energy mix to 15% by 2030 from 6% now. This would require current gas demand to rise five times by 2030, if India’s energy consumption were to grow 5.5% annually. With about 1,900 CNG refueling stations and 3.5 million CNG-driven vehicles, this fuel has become a key contributor to the expansion of gas consumption in the country. City gas distributors also have access to cheaper domestic gas for distribution to CNG vehicles. Factory-fitted CNG vehicles are dearer than petrol vehicles at the time of purchase but enjoy lower operating cost due to cheaper CNG fuel. The oil ministry now wants the purchase price of CNG vehicles to go down to encourage more customers to buy them. All vehicles, except EVs, attract 28% GST currently. The GST Council had in July cut the tax rate on EVs to 5% from 12%. India is engaged in rapidly scaling natural gas transport and distribution infrastructure to boost gas demand. The regulator has awarded about 140 city gas distribution licenses in two years, which is expected to raise natural gas penetration to 70% of the country’s population from 20% now.

https://auto.economictimes.indiatimes.com/news/oil-and-lubes/oil-ministry-wants-cut-in-gst-on-cng-vehicles-to-5/73039054

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Auto LPG suppliers raise concerns over stalled growth of eco-friendly fuel

The apex body for Auto LPG suppliers raised concern over the “stalled growth” of the eco-friendly automotive fuel, saying due to several “detrimental” government policies, India has been missing out on “huge” environmental benefits that can be accrued by shifting to it. Auto LPG is a portable,

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eco-friendly fuel used in vehicles which in turn helps curb vehicular emissions and pollution. A statement issued by the Indian Auto LPG Coalition (IAC) said the LPG sector has been seeking support from the government to boost the usage of this fuel, which is present in the country in abundance. “Auto LPG is eco-friendly and available in abundance. The Auto LPG sector has been seeking policy support from the government. Currently, several policies are stalling the growth of this fuel. “”One of the most detrimental policies that have contributed to curtailed growth of conversions to Auto LPG and CNG are the existing Type approval norms for vehicle conversions to gaseous fuels,” said Suyash Gupta, Director General, IAC. Type approval or certificate of conformity is required to obtain conversion kits in vehicles to switch from one fuel to another. Gupta told that the Type approval norms in the country are “cost prohibitive” and must be changed. “These norms of the Ministry of Road and Transport and Highways require extremely cost prohibitive Type Approvals for Auto LPG and CNG conversions to be renewed every three years.  “This punishing practice that is in complete variance of established global norms has been extremely detrimental to the conversion industry in India. In fact, the government’s cleaner fuel push in the form of the City Gas Distribution project faces the threat of being stalled due to lack of conversion providers, owing to these draconian regulations,” he said. The IAC said while Auto LPG has consistently been cheaper than petrol by almost 45-50 per cent, yet “India has been missing out on huge environmental benefits that can accrue by shifting to Auto LPG.” “Auto LPG has almost 50 per cent lesser PM emissions than CNG and petrol and 80 per cent lower PM than diesel, with lower carbon dioxide emissions,” it said. Gupta said the IAC has urged the government to make the type approval validity perpetual.
“The high GST rate is proving detrimental to the conversion industry and hampering the growth of environment friendly transport fuels at a time when our cities are reeling under the impact of harmful vehicular emissions. The GST on conversion kits must be brought under the 5 per cent slab to encourage more conversions.” The body highlighted that despite its environmental benefits in the long run, Auto LPG is also slabbed at a high GST rate of 18 per cent that pushes up its cost for consumers. “This is inexplicable for a country that is yearning for clean air,” Gupta said.

https://auto.economictimes.indiatimes.com/news/industry/auto-lpg-suppliers-raise-concerns-over-stalled-growth-of-eco-friendly-fuel/73181288

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Electric Mobility

Ora R1-world’s cheapest electric car launching in India in 2020

Here is good news for all those who are waiting for the cheapest electric car in India to be launched. Your wait is over as China’s largest SUV automobile manufacturer Great Wall Motor is ready to enter the Indian market this year.

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So let us read more about Ora R1-world’s cheapest electric car. The company with its brands Haval and ORA brands will make its way in India. It will showcase both of its brands in the upcoming Auto Expo 2020. This car model is said to be the cheapest electric car in the world with a price tag of Rs 6.2 lakh to 8 lakh.

Great Wall Motor (GWM) is China’s largest pickup and SUV manufacturer which owns four brands which include Haval, Wey, Ora and Great Wall Pickup. GWM is headquartered in Baoding, Hebei, China. Interestingly, it is named after the Great Wall of China formed in 1984. Currently it is looking for a suitable location to set up a manufacturing plant in India. Ora R1 electric car offers a maximum range of 351 Km and runs on a 35kW motor on a single charge. This is a very good range when compared to other available cars in India such as Hyundai’s Kona which has a range of 452 Km on a single charge but it costs about 28 lakhs. Coming to its performance, it gives a top speed of 100 Kmph. The company is also providing free servicing for three years or 1.20 lakh Km and eight years or 1.5 lakh Km. We expect the price of this car in India to be in the range of Rs 6.23-8.00 lakh. In India the average electric cars are costing around Rs 13 lakh which is much higher than petrol driven cars. The launch of Ora R1 will definitely increase the sales of the electric car segment in India and also provide an option to potential customers.  It  will compete with other electric cars such as Tata Nexon, Hyundai Kona, MG ZS etc.

Source: electricvehicles.in

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Global electric vehicle battery market will grow by 23% between 2019 and 2023

The global electric vehicle (EV) battery market will grow by 23% or $15.7 billion between 2019 and 2023, according to research firm Technavio. 65% of the growth is expected to come from the Asia Pacific region.

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An increasing number of automotive companies are partnering to develop batteries with improved specifications. The main focus is developing batteries with high charging rates, quality and fewer leakage risks compared to existing lithium-ion batteries. For instance, in April 2018, the Indian Space Research Organization (ISRO) announced that it is open to sharing the technology used in its space-grade lithium-ion battery with private players in the automotive industry. As a response to this, ISRO received interest from over 100 companies, of which 14 were selected in December 2018. The capability is getting a lot of attention from utility companies as they seek to employ demand response capabilities to relieve the main grid during times when demand is high. The EV battery market is highly fragmented with many players occupying the market, according to the study.

Source: smart-energy.com

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Ather Energy teases its next scooter 450X, bookings open

Ather Energy has teased its next electric scooter in India, the 450X. The upcoming scooter will be based on the Ather 450 e-scooter. While the company has not revealed the details of the model, it has started receiving bookings for the 450X.

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The company has also informed that the launch of the scooter will take place soon.
The regular Ather 450 electric scooter is powered by a 2.4 kWh lithium-ion battery pack. The electric motor generates 7 PS of peak power and 20.5 Nm of peak torque. Also, it comes with two riding modes, which are Sport and Ride. The Ather 450 offers a range of 65 km on a single charge. Expect the 450X to offer a bit more. The move comes after the company has expressed its will to expand the network across different cities like Delhi, Mumbai, Hyderabad, Pune. Currently, it sells the Ather 450 scooter in Bengaluru and Chennai only.
Currently, the company has only one product in its portfolio, the Ather 450. Previously, it had the Ather 340 electric scooter on sale, but that was discontinued in September 2018.

Source: ET Energyworld

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Telangana looks forward boosting EV infrastructure by 2021

To promote electric vehicles adoption Telangana government made an announcement that it is collaborating with Rajasthan Electronics and Instruments Limited (REIL) to set up 138 charging stations across the state.

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The project will be a part of the second phase of the central government’s ambitious Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme. It is also in line with the state government’s EV policy which aims to attract the investment worth $3Bn and create employment for fifty thousand people by 2022 through EVs in shared mobility, charging infrastructure development and EV manufacturing activities. The Telangana government has partnered with the Rajasthan Electronics and Instruments Limited ( REIL) which is working with the Department of Heavy Industries (DHI) to install EV charging infrastructure all over the country. Apart from REIL, the other state-owned departments like DHI, Energy Efficiency Services (EESL), National Thermal Power Corporation Limited (NTPC), and PowerGrid got an approval to install more than 2.7 thousand EV charging stations across 90 cities in India. The REIL has been already installed more than 200 EV charging stations in Delhi, Jaipur and Chandigarh. Telangana is providing a clear roadmap for developing the charging infrastructure in the state and is also providing incentives related to various components of ownership cost of electric vehicles. The three electric vehicle battery (Li-ion) manufacturers will set up plants in Telangana soon as part of the NITI Aayog’s EV push. A 10 gigawatt combined capacity is expected to build with an investment of 1500 crore in the first phase.

Source: electricvehicles.in

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Gas/ Pipelines/ Company News

Iran tension may push up fuel prices, spook bid to boost economy

Global oil prices spiked 4% on Friday as tensions flared up in the Middle East, setting off worries over an extended spell of market volatility hitting consumer sentiment by pushing up fuel prices and blunting the government’s efforts to revive the pace of economic growth.

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International benchmark Brent crude shot up 4% towards $70 per barrel before settling down at $68.76 as the market turned jittery over the possibility of Iran blocking the Strait of Hormuz, a vital shipping route for global oil trade, to retaliate against the US killing one of its top military commanders. As the world’s third-largest buyer of oil, India is vulnerable to tensions in the Middle East on two counts. One is of course the price factor and its impact on the country’s economy and consumer sentiment. The second is the possibility of supply disruption, in which case the country will have to spend more on supplies from alternative sources. But here too, things boil down to money matters. Costlier crude pushes up pump prices and fuel bills. This squeezes household budgets and puts a damper on consumption as consumers turn cautious over non-essential spending. For the government, higher oil prices mean less fiscal space for freebies or grand social sector schemes needed to revive a sagging economy. A spell of high pump prices ahead of election in Delhi will not augur well politically for the BJP, which rules at the Centre and is trying to ride back into power in the capital. Soaring oil pushes up inflation as government’s subsidy outgo and industry’s input cost rise. It also hurts financial and currency markets as higher demand for dollar to pay for oil imports puts pressure on the rupee and upsets the current account deficit. All these depress market sentiments and consumer appetite, which in turn suppress consumption. A $10 increase in global crude oil prices shaves off India’s GDP by up to 30 basis points (100bps = 1 percentage point).On the supply side, India’s vulnerability to Middle Eastern flare-ups come from its heavy dependence on the region for its oil and gas supplies. International Energy Agency reckons two-thirds of the oil and half the LNG (gas carried in ships) imported by India come from the strait between Iran and Oman. The narrow shipping lane, 21 miles wide at its narrowest point, is the only way to move oil from the Persian Gulf to the world’s open seas. Any disruption in oil traffic will have a devastating effect on prices — with some analysts predicting price above $80. That will be a body-blow for the ailing Indian economy.

https://timesofindia.indiatimes.com/business/india-business/iran-tension-may-push-up-fuel-prices-spook-bid-to-boost-economy/articleshowprint/73092854.cms

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ONGC gets cracking at Panna-Mukta field, saves Rs 1 cr in shipping costs

Sources in the know said the company will lay a small undersea pipeline soon to completely do away with the requirement of hiring ships for transporting oil to land. State-owned Oil and Natural Gas Corp (ONGC) has begun an exercise to shed excess cost at the Mumbai offshore oil

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and gas fields of Panna-Mukta, whose control it regained after two and half decades and has already saved Rs 1 crore in the shipping cost. ONGC has changed the contract for bringing oil produced from the fields lying in the Arabian Sea to land, resulting in saving of about $5,000 per day, sources with direct knowledge of the development said. It is expecting an upside in production too after a re-appraisal. Sources in the know said the previous operators, Shell India and Reliance, had engaged a floating storage and transportation vessel from Mercator Ltd for shipping oil. Soon after taking over the field last month, ONGC changed the shipper to state-owned Shipping Corporation, resulting in saving of about $5,000 per day, they said adding the saving totals to Rs 1 crore-plus. Sources in the know said the company will lay a small undersea pipeline soon to completely do away with the requirement of hiring ships for transporting oil to land. The 25-year production sharing contracts for the PMT fields expire this week and Reliance and Shell had decided not to seek an extension for Panna-Mukta fields, resulting in them being reverted to ONGC on December 21, 2019. The Tapti fields had ceased production earlier in 2016 and the Tapti process platform facilities were handed over to ONGC (Government of India nominee) in 2016. Sources said ONGC sees an upside in oil and gas production from the Panna-Mukta field which it will firm up after doing a reappraisal of the reserves. The fields produce about 10,000 barrels of oil per day and 4 million standard cubic meters per day of natural gas.

https://www.business-standard.com/article/companies/ongc-gets-cracking-at-panna-mukta-field-saves-rs-1-cr-in-shipping-costs-120010200041_1.html

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Government approves over Rs 5000 cr project for natural gas supplies in Northeast

The Government has approved the Viability Gap Funding, VGF of 5 thousand, 559 crore rupees to Indradhanush Gas Grid Limited  to build Natural Gas Pipeline Grid covering 8 North Eastern states.
Cabinet Committee on Economic Affairs, CCEA approved the capital grant in New Delhi yesterday. 

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This is second such funding by the government for gas pipeline project. The total cost of the grid is 9 thousand 256 crore rupees and sanctioned VGF amount will cover 60 per cent cost of the project. The 1,656-km pipeline will connect Guwahati in Assam to major cities in the region such as Itanagar, Dimapur, Kohima, Imphal, Aizawl and Agartala. Petroleum Minister Dharmendra Pradhan said, the project is critical towards implementing the government’s Hydrocarbon Vision 2030 for the North-East. He said, the Gas Pipeline Grid would be developed in all the eight states of North-Eastern region. The Capital Grant will provide natural gas supplies to various types of consumers and would help in substituting the liquid fuels. The government said that the pipeline grid would ensure reliability and uninterrupted natural gas supplies to the consumers which otherwise gets severely affected due to various reasons in this part of the country. The CCEA also gave in principle approval to sell equity held by four Central Public Sector Enterprises and two state PSUs in Neelachal Ispat Nigam Limited-NINL. It approved strategic disinvestment of 49.78% equity shareholding of Minerals and Metals Trading Corporation MMTC Limited and 10.10% of National Mineral Development Corporation. The CCEA, gave approval for strategic disinvestment of point 68% of MECON and Bharat Heavy Electricals Limited each. 

http://www.newsonair.com/Main-News-Details.aspx?id=377403

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Policy Matters/ Gas Pricing/Others

Two schemes floated to revive stranded gas-based power units

The power ministry has finalized two schemes to procure 4,000 MW from gas-based power plants to rescue stranded units put up at a cost of about Rs 1,00,000 crore. The schemes include procuring 2,000 MW from gas-based plants

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through auction and bundling it with an equal capacity of solar power. Another 2,000 MW will be procured through online reverse auction, on a model similar to previous such schemes. Power producers welcomed the long awaited scheme, saying it will bring almost 11,000 MW of stranded gas assets out of NPA situation. “The scheme should be quickly implemented with all waivers,” Association of Power Producers director general Ashok Khurana said. “The key to success of this scheme would depend on sourcing gas at competitive rates.” He said with the prevailing subdued price of RLNG, gas-based power producers should be able to market their power on a standalone basis without even needing solar as bundled power. “But on a long-term basis, if India has to move towards clean energy, renewable energy and gas-based power has to co-exist,” Khurana said. A senior government official said a draft cabinet note is being prepared for the two schemes to procure total 4,000 MW from the stressed gas-based projects. Under the bundling scheme, the solar capacity will be given priority to run. Gas-based capacity will run at times when solar power is not available and producers will have the option to sell produce in spot market in times of back down by distribution companies. Both schemes are proposed to be run without subsidy for a minimum of three years .. The other scheme proposes to select bidder through an online reverse auction where bids would be put in by the developers based on incentives to be provided by the central and state governments to reduce end tariffs. Developers will have the option to buy gas on their own or through state-run gas transporter GAIL (India) Ltd. The proposed haircuts include waiver of state and central taxes on imported LNG, waiver of GST on regasification and transportation of the fuel, reduction of pipeline tariff charges and marketing margin by GAIL.

https://economictimes.indiatimes.com/industry/energy/power/two-schemes-floated-to-revive-stranded-gas-based-power-units/articleshow/73145348.cms

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The need for a single energy ministry – India

Five different ministries along with a multitude of regulators govern India’s energy sector. Petroleum and natural gas, coal, renewable energy and nuclear energy have separate ministries or departments. We also have a Ministry of Power, along with

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State-level bodies that regulate electricity distribution companies, or DISCOMS. Add to this, the presence of different regulators for each type of fuel and energy source which makes it cumbersome for businesses operating in this sector. Further, the petroleum and natural gas sector has two regulators – Directorate General of Hydrocarbons for upstream activities and the Petroleum and Natural Gas Regulatory Board for downstream activities. There are also issues with data collection. No single agency collects energy data in a wholesome and integrated manner. Data pertaining to consumption are barely available while supply side data collected by agencies of respective ministries are riddled with gaps. The Ministry of Statistics and Programme Implementation collates data available from various ministries and conducts surveys at sporadic intervals. On the energy efficiency front, the Bureau of Energy Efficiency is the sole statutory authority with the mandate to regulate energy efficiency on the consumption side. There is no agency or body for the same purpose on the supply side. This stands in stark contrast to most other nations with their varied energy governance models. Developed and efficient countries such as the United States, Germany, France and the United Kingdom have their vibrant, diverse and prolific energy sectors administered by a single ministry or department. There are also instances where the energy ministry is in conjunction with other portfolios such as environment, climate change, mines and industry. For example, the U.K. has the “Department for Business, Energy & Industrial Strategy”, France has the “Ministry of the Environment, Energy and Marine Affairs”, Brazil has the “Ministry of Mines and Energy” and Australia has the ‘Ministry of Environment and Energy’. The predominance of unified energy ministries is evident. The Kelkar Committee in its report “Roadmap for Reduction in Import Dependency in the Hydrocarbon Sector by 2030” (2013) stated that “Multiple ministries and agencies are currently involved in managing energy-related issues, presenting challenges of coordination and optimal resource utilization, hence undermining efforts to increase energy security”. In the Draft National Energy Policy (NEP), the NITI Aayog has advocated that a Unified Ministry of Energy be created by merging the Ministries of Petroleum and Natural Gas (MoPNG), Coal (MoC), New and Renewable Energy (MNRE) and Power (MoP). The Department of Atomic Energy (DAE) has been left out since it has implications beyond the scope of energy and involves national security issues. The proposed ministry would have six agencies under it to handle various aspects of the energy sector — Energy Regulatory Agency, Energy Data Agency, Energy Efficiency Agency, Energy Planning and Technical Agency, Energy Schemes Implementation Agency and Energy R&D Agency.

https://www.thehindu.com/opinion/lead/the-need-for-a-single-energy-ministry/article30453805.ece

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Integrated energy outlook – enabling optimization

A single unified ministry of energy would help India to have an integrated outlook on energy that would enable us optimize our limited resources to meet the goals of energy security, sustainability and accessibility. In the fast-changing energy

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landscape of our country, having a single energy ministry would be beneficial as it would allow for a quicker policy response. Formulating an integrated and wholesome energy policy in the current governance structure is a complex and challenging task not only due to lack of coordination among ministries but also due to the absence of good quality consumption data and an inadvertent promotion of their own fuels over other choices, which may not always be the best option. The present government has already taken some steps towards unifying the governance structure of the energy sector such as appointing a single minister for both MNRE and MoP. This move has been lauded across sections of society as both those sectors are heavily interlinked. Having the same person heading both of these ministries will help resolve long-standing issues faced by both conventional and renewable power generators such as power balancing and transmission infrastructure planning. In the past too, this government has had the same minister for MNRE, MoP and MoC with great results in village electrification, LED bulb distribution (Unnat Jyoti by Affordable LEDs for All, or UJALA), power sector reforms (Ujwal DISCOM Assurance Yojana, or UDAY), coal block e-auctions and alleviation of coal shortages. This demonstrates the intention of the political leadership to reform the energy governance structure. They have already shown a disposition towards unifying critical ministries. A pertinent example is the newly created Ministry of Jal Shakti which was formed by merging the Ministry of Water Resources, River Development and Ganga Rejuvenation and the Ministry of Drinking Water and Sanitation. The objective of this action is to unify water management functions, treat the issues of water management holistically and ensure better coordination of efforts. This was a crucial decision at a time when nearly 600 million Indians faced “high to extreme water stress”, while 75% households did not have drinking water on their premises. Though the actions by this government are a step in the right direction, there is a long road ahead. Accepting and implementing the recommendations of the NEP on reforming energy governance, which is to be placed for the approval of the Cabinet soon, would need to be carefully traversed given their hard-hitting implications on the existing bureaucratic structure. But nothing is more important than ensuring energy security, sustainability and accessibility. In this age of energy transition, this can only happen with quick and holistic decision-making as well as providing a level playing field for various fuels, all of which can happen if a single ministry handles the entire sector. Such a Unified Ministry of Energy will not only enable India to keep up with the global energy transition but also to continue to be a leader in adopting cleaner energy sources.

https://www.thehindu.com/opinion/lead/the-need-for-a-single-energy-ministry/article30453805.ece

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LNG Development and Shipping

Oil PSUs start payments for Mozambique LNG project

Oil and Natural Gas Corp, Bharat Petroleum and Oil India have begun making their share of payment of about $2 billion towards the much-delayed Mozambique liquefied natural gas (LNG) project. Three state-run firms have a combined 30% participating interest in the Mozambique gas project,

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which made a final investment decision last year to spend about $15 billion on developing gas fields and liquefaction project. About 60% of the project cost is planned to be funded by debt while the balance 40% would be shared as equity contribution by all stakeholders proportionately. Of the $6 billion equity component, Indian firms will contribute about 30% or a little less than $2 billion. ONGC, which owns 16% participating interest in the project, will have to pay about $1 billion while BPCL and Oil India with their 10% and 4% interest, respectively, will contribute a little less than $1 billion together, according to people familiar with the matter. The cash calls have started and companies have begun transmitting their contributions, they said. The full contribution will have to be made over four years. Total, the French energy giant, is the operator of the project with 26.5% stake, which it acquired last year for $3.9 billion. Japan’s Mitsui holds 20% while the balance is split between ENH (15%) and PTTEP Mozambique Area 1Ltd (8.5%).The current project involves development of the Golfinho and Atum fields located within Offshore Area 1 and the construction of a two-train liquefaction plant with a capacity of 12.9 MMTPA. The Area 1 contains more than 60 trillion cubic feet (Tcf) of gas resources, of which 18 Tcf will be developed with the first two trains. The project will start production by 2024, according to Total. The project has now been able to sell almost 90% of its production through long-term contracts with LNG buyers in Asia and Europe The project would also provide gas for consumption in Mozambqiue. The LNG market is currently oversupplied as liquefaction projects have proliferated across the globe. Analysts do not expect LNG prices to recover quickly.

https://economictimes.indiatimes.com/industry/energy/oil-gas/oil-psus-start-payments-for-mozambique-lng-project/articleshow/73147857.cms

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Indian companies seek LNG cargoes for February

Indian companies are seeking liquefied natural gas (LNG) cargoes for delivery in February in the spot market, industry sources said on Tuesday. India’s Bharat Petroleum Corp Ltd is seeking a cargo for delivery into Dahej on Feb. 19 in a tender

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that closes on Jan. 7 and is valid for a day, they said. Indian Oil Corp is seeking a cargo for delivery into Dahej on Feb. 18 and another cargo for delivery into Ennore for Feb. 1-20 through two tenders closing this week, one of them said. Gail (India) is also looking for a cargo for delivery in February, the source added, though this could not immediately be confirmed. Gail has separately sold a cargo for loading in March from Sabine Pass LNG plant in the United States and bought a cargo for delivery into Dahej or Dabhol in early February through a swap tender, a second source said.

Source: Indian Oil & Gas/Reuters

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Natural gas consumption in Kochi touches new high

The spike is due to the rise in LNG consumption by Bharat Petrochemicals Corporation Ltd (BPCL), which is using up about 28 lakh cubic metres and FACT (9 lakh cubic metres) per day. KOCHI: The natural gas consumption in Kochi has touched an all-time high.

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The daily consumption of natural gas hit 38.3 lakh cubic metre on Saturday, beating the earlier record of 35 lakh cubic metres two years ago. The spike is due to the rise in LNG consumption by Bharat Petrochemicals Corporation Ltd (BPCL), which is using up about 28 lakh cubic metres and FACT (9 lakh cubic metres) per day.  HOCL, City Gas Distribution company (Indian Oil and Adani Gas Pvt Ltd), Tata Ceramics and Nitta Gelatin India, based here, are among the other major consumers. “The consumption of the natural gas by vehicles and households alone is 34,600 cubic metres, which is likely to go up in the future as the automobile sector experiences major relief when switching over to CNG,” said Tony Mathew, general manager (construction), Gas Authority of India Ltd(GAIL). GAIL is set to commission the Kochi-Koottanad-Bengaluru-Mangaluru natural gas pipeline project (KKBMPL) in March this year. In the industrial sector, there is a saving of Rs 17 for each kg of LPG when switching to natural gas. “That means for a small industry using 1,000 kg of LPG per day, it can save up to Rs 17,000 per day after switching to natural gas,” Mathew said.

https://www.newindianexpress.com/cities/kochi/2020/jan/13/natural-gas-consumption-in-kochi-touches-new-high-2088733.html

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INTERNATIONAL NEWS

 

Natural Gas / Transnational Pipelines/ Others

Factbox: Commodity markets was on tenterhooks as Persian Gulf risks surged

Geopolitical tensions between the US and Iran continued to send shockwaves through the commodity markets Monday, with oil prices breaking above the key $70/b level and gold and precious metals surging to multi-year highs as their role as safe havens comes to the fore.

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Market risks have escalated following the US killing of Iranian General Qassem Soleimani last week as participants weigh the potential for supply disruptions throughout key Middle East commodity hotspots, including shipping chokepoints, terminals and infrastructure. While there are heightened risks of retaliatory attacks around oil facilities in Saudi Arabia’sEastern Province, the uncertainty around how and when Iran will likely retaliate as threatened and where the conflict will go is spread across oil and other commodities, including LNG.

“Barring massive interruptions of oil supply from the aftermath of the US airstrike last Friday, Brent prices are likely to stay elevated but is unlikely to be above $70/b on a sustainable basis or for too long. We continue to believe see chances of a full-scale conflict in the Middle East leading to massive interruptions of oil supply as below 50/50 though things may change,” S&P Global Platts Analytics said. S&P Global Ratings said its base-case assumption that any military action by either side would not lead to a fully-fledged direct military confrontation. “We continue to believe that any escalation will remain contained given that a direct conflict would be economically, socially, and politically destabilizing for the entire region, including US-Gulf allies,” S&P Global Ratings said in a note. “[But] if a protracted and wider conflict emerges, assuming export routes remain functional, the fiscal benefit of potentially higher oil prices for Gulf sovereigns will likely be offset by the adverse effect on capital outflows and weaker economic growth.”

PRICES

** Front-month Brent briefly broke above $70/b in early European trade Monday to hit $71.75/b, up $2.15 from Friday’s settle, The benchmark futures contract rose 3.5% on Friday in the initial market reaction to the US attack, the highest since September 16, 2019, the first trading day after attacks on Saudi Arabia’s pivotal Abqaiq processing facility and Khurais oil field. That attack caused the benchmark contact surge over $10 to $71.95/b.

** The immediate spot LNG price reaction from the killing of Soleimani has been muted. The S&P Global Platts JKM price assessment for February was assessed at $5.35/MMBtu on Monday (Jan6), up only slightly from Friday’s $5.26/MMBtu.

** Asia’s top Middle Eastern crude customers — China, South Korea, India and Japan — face some risk of term supply allocation cuts, with escalating tensions between the US and Iran putting key production facilities and Asia-bound trade routes in danger.

** Qatar and the UAE — both of which export LNG via the key Strait of Hormuz shipping channel — supplied an estimated 81 MMT of LNG to world markets in 2019, according to S&P Global Platts Analytics data.

** Qatar supplied the majority — 75.9 MMT — which made up 22% of global LNG supply last year of an estimated 348 MMT.

** Any disruption to Qatar’s mainstay LNG exports would likely have a major impact on the global gas market, despite the current glut.

Strait of Hormuz

** The UK is beefing up security around the Strait of Hormuz, the key chokepoint for oil and gas ships traversing the Persian Gulf. Iran had in the past threatened to close the waterway in case of war in the region.

** The Strait of Hormuz is the world’s most important oil chokepoint because of the large volumes of oil that flow through it. In 2018, its daily oil flow averaged 21 million b/d, or the equivalent of about 21% of global petroleum liquids consumption, according to the US Energy Information Agency.

** Crude and condensate flows through the strait averaged 17.3 million b/d in 2018, while refined product flows averaged 3.3 million b/d, according to the EIA. LNG flows averaged 4.1 Tcf/year.

** The US Fifth Fleet is responsible for about 2.5 million square miles of area including the Arabian Gulf, Gulf of Oman, North Arabian Sea, Gulf of Aden, and the Red Sea, according to its website. The policed area spans 20 countries and includes three critical choke points at the Strait of Hormuz, the Suez Canal and the Strait of Bab-el-Mandeb at the southern tip of Yemen.

** A number of tanker incidents in the Middle East buffeted oil prices last year. The UK-flagged Stena Impero, which had been detained by Iran for over two months after being seized in the Persian Gulf, was released in September.

** Ship operators in the Middle East have been on high alert, and insurance rates jumped after tanker attacks in the Gulf of Oman in May and June last year. The US has blamed Iran for previous attacks, although Iran has denied responsibility.

Red Sea

** Most exports of petroleum and natural gas from the Persian Gulf that transit the Suez Canal, or the SUMED pipeline, pass through both the Bab-el-Mandeb and the Strait of Hormuz.

** In 2018, an estimated 6.2 million b/d of crude oil, condensate, and refined petroleum products flowed through the Bab-el-Mandeb Strait toward Europe, the US, and Asia, according to the EIA.

https://www.hellenicshippingnews.com/factbox-commodity-markets-on-tenterhooks-as-persian-gulf-risks-surge/[Edited]

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Russia’s Gazprom extends Belarus gas supply, transit deals till 2021

Russia’s Gazprom said late Tuesday it has extended its gas supply and transit contracts with Belarus until 2021 and signed a protocol on the pricing procedure for gas supplies in January and February. Under the documents signed, the contracted

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volumes for delivery and transit in 2020 will remain at the same level as in 2019,” Gazprom said in a statement. The agreements come after Russian President Vladimir Putin and his Belarusian counterpart, Alexander Lukashenko, failed to reach a final agreement on oil and gas supplies for 2020 by the end of 2019. Government statements released Tuesday indicated temporary agreements would be signed before the two presidents met after the winter holidays in mid-January to negotiate further. In mid-December, Russian media quoted Lukashenko as saying that Russia had agreed in principle to supply 20-22 Bcm of gas in 2020. Gas prices have been a regular bone of contention in recent years, leading to oil and gas supply disruptions in 2004, 2007 and 2010.

https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/010120-russias-gazprom-extends-belarus-gas-supply-transit-deals-till-2021

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Israel to build 2 natural gas power units amid plan to end coal usage

A government panel approved an Israeli Energy Ministry proposal to build two power units to be operated solely with natural gas as part of a plan to eliminate coal usage by 2025 and improve air quality, the ministry said on Tuesday.

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The two units are slated to be completed in 2022 and will supply 1,200 megawatts of power, replacing four coal-fired production units, it said. They will be built at a power plant in the central city of Hadera, which currently has six coal generation units, providing 2,500 megawatts of electricity. The two newest units were installed to reduce emissions and minimize the environmental impact, the ministry noted. Coal usage in producing electricity dropped to 30 per cent in 2018 from 59 per cent in 2010, leading to a 50 per cent decline in air pollution the past five years, it added.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/israel-to-build-2-natural-gas-power-units-amid-plan-to-end-coal-usage/73148204

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Russian begins TurkStream gas flows to Greece, North Macedonia

Russia has started European gas deliveries through the new TurkStream pipeline to Turkey, Bulgaria’s Bulgartransgaz said on Sunday (Jan 12), as Moscow looks to reduce shipments via Ukraine. Russia is building TurkStream and doubling the capacity of NordStream across the Baltic Sea

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to Germany as part of plans to bypass Ukraine in its gas deliveries to Europe. “Russian gas deliveries not only for us but also for Greece and North Macedonia are being carried through the new entry point (at our Turkish border),” Bulgartransgaz CEO Vladimir Malinov told Bulgarian national radio BNR. Russian gas producer Gazprom started shipping about 3 BCM of gas to Bulgaria via TurkStream on January 1, replacing a route that formerly passed through Ukraine and Romania. Gazprom shipped about 3 3 BCM to Greece and about 500,000 mcm to North Macedonia via that route last year. Mr Malinov said that lines – the TransBalkan pipeline – was idle at present, but added that it was made reversible and could be used for shipments to Romania, Moldova and Ukraine if there was demand. “We have thus opened the route to access for LNG from the Greece’s LNG terminal Revithoussa up to Ukraine,” he said. Russia is building TurkStream in two pipelines, each with an annual capacity of 15.75 BCM. The first pipeline is aimed at supplying Turkey and the second would run further from Bulgaria to Serbia and Hungary. Bulgaria hopes to be able to make shipments to Serbia by May and build the whole section by year-end. While Russia and Ukraine at the end of last year signed a five-year agreement on gas transit to Europe, volumes are set to fall from 65 BCM in 2020 to 40 BCM annually from 2021 to 2024. Relations between the one-time allies have deteriorated since Russia annexed Crimea in March 2014 and pro-Kremlin separatists seized a swath of eastern Ukraine. Ukraine halted its own direct imports of Russian gas in November 2015.

https://www.businesstimes.com.sg/energy-commodities/russian-begins-turkstream-gas-flows-to-greece-north-macedonia

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U.S. sees most available oil and natural gas in history

Recent data shows that the U.S. had more minable oil and natural gas reserves than ever before. “Proved” oil and gas reserves are the amount that drillers could get out of the ground affordably and with current technology. The U.S. Energy Information

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Administration found that in 2018, those reserves reached historic peaks. After decades of decline starting in the 70s, the advent of fracking in the mid-2000’s boosted the amount of oil and gas we could get leading to these recent highs. Peter Maniloff, an assistant professor of economics at the Colorado School of Mines, says more reserves may mean more employment in oil and gas states, but, “There’s the saying that the stone age didn’t end because they ran out of stones. We have vast quantities of fossil fuels in the ground. If we’re going to address climate change, then we’re going to have to leave some of them in the ground.” He says there also isn’t a guarantee that oil and gas industries will out-perform increasingly cheap renewable energies and electric vehicles.

Mountain West oil and gas reserves were mixed. Natural gas reserves decreased between 2017 and 2018 in Montana, Wyoming, Idaho, Utah and Colorado. Meanwhile oil reserves in Wyoming, Colorado and Utah all went up.

https://www.wyomingpublicmedia.org/post/us-sees-most-available-oil-and-natural-gas-history

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Global LNG Development

Asian prices edge higher on Indian demand, Mideast tensions

Asian spot prices for liquefied natural gas (LNG) for cargoes delivered in February rose slightly, amid spot demand from India and tensions in the Middle East. The average LNG price for February delivery into northeast Asia LNG-AS is estimated

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to be about $5.30 per MMBtu, up 15 cents from the previous week, several industry sources said. The price for cargoes delivered in March is estimated to be about $4.75 per MMBtu, they said. Indian companies have been seeking cargoes for delivery in February and March, sources said. Bharat Petroleum Corp Ltd was seeking a cargo for delivery into Dahej on Feb. 19 while Indian Oil Corp was seeking several cargoes for delivery in February and March through separate tenders, they added. Gail (India) was also looking for a cargo for delivery in February, and separately sold a cargo for loading in March from Sabine Pass LNG plant in the United States and bought a cargo for delivery into Dahej or Dabhol in early February through a swap tender, they said. India’s GSPC may have bought a cargo for delivery over late January to February at around $5 per MMBtu, one of the sources said, though this could not immediately be confirmed. Geopolitical risks also supported prices. Payments known as war risk premiums for tankers shuttling through the Strait of Hormuz could rise significantly, adding hundreds of thousands of dollars to shipping costs, after Iran’s retaliatory strikes this week on Iraqi bases that house U.S. forces. China imported a record high monthly volume of LNG in December, overtaking Japan as the world’s top importer of the fuel for a second consecutive month, ship tracking data from Refinitiv Eikon showed. But the surge in Chinese imports are due to the arrival of term volumes buyers committed to previously and spot volumes purchased earlier in the year, rather than a sudden rise in domestic demand, traders said. The rise in spot price was capped by exports from Angola and Brunei. Brunei’s export plant offered a cargo for delivery in March, while Angola’s project offered a cargo for delivery over late January to early February to as far as Singapore, sources said. Traders expect spot prices to drop to below $5 per MMBtu once winter demand eases.

Source: LNG Global

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Bulgaria to buy 20% stake in Greek LNG terminal

Bulgaria will buy a 20% stake in a liquefied natural gas (LNG)terminal off northern Greece as it works to move away from its almost complete dependence on gas from Russia, the government said on Wednesday ( Jan 8).

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The United States and Qatar are expected the be the main suppliers of LNG for the facility. “The diversification is not just words,” Prime Minister Boyko Borissov told reporters at the opening of the first session of the U.S.-Bulgaria strategic dialogue. He said Bulgaria’s stake in the gas terminal would be the same as that of Greece’s state energy company DEPA. Under the deal, state-owned gas company Bulgartransgaz will buy 20% of Gastrade, part of Greek energy company Copelouzos, which is developing a floating LNG facility off the Greek city of Alexandroupolis. The LNG terminal, which will have an estimated annual capacity of about 6.1 BCM, will aim to supply gas to southeastern Europe via the Interconnector Greece-Bulgaria (IGB) natural gas pipeline. The government said state gas provider Bulgargaz should take part in the binding market test for the terminal and book between 300 and 500 MMSCM of gas per year for a period of three to five years. At the moment, Bulgaria meets its gas needs of about 3 BCM per year mainly with deliveries from Russia’s Gazprom. However, it imported some 400,000 mcm of gas from Greece last year for the first time.

Source: LNG Global

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Fourth unit at Kinder Morgan’s Georgia Elba LNG export plant ready for service

Kinder Morgan Inc asked U.S. energy regulators for permission to put the fourth liquefaction train in service at its nearly $2 billion Elba Island liquefied natural gas (LNG) export plant in Georgia. Kinder Morgan has said it expects one 0.3 MMTPA

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LNG train to enter service about each month through the summer of 2020 when all 10 trains should be operating. Kinder Morgan said train 2 would be ready for service on Jan. 16, according to a filing with the U.S. Federal Energy Regulatory Commission (FERC) on Monday (Jan 13). Train 2 would be the fourth train to enter service at the plant. Units 1, 3 and 4 were already operating. The first of 10 trains at Elba – train 1 – entered service in early October. The first export cargo from Elba left in December. Elba, which is 51% owned by units of Kinder Morgan and 49% by EIG Global Energy Partners, is designed to liquefy about 2.5 MMTPA of LNG, equivalent to around 0.350 billion cubic feet per day (bcfd) of natural gas. One billion cubic feet is enough gas to fuel about 5 million U.S. homes for a day. Royal Dutch Shell Plc has a 20-year contract to use the facility. Including projects under construction, U.S. LNG export capacity is expected to rise to 9.6 bcfd by the end of 2020 and 10.3 bcfd by the end of 2021 from 7.6 bcfd now. That keeps the United States on track to become the world’s biggest LNG exporter in 2024. It became the third-biggest LNG exporter in 2019, behind Qatar and Australia.

Source: LNG Global

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China imports record LNG volumes in Dec, overtakes Japan for second month

China imported a record high monthly volume of liquefied natural gas (LNG) in December, overtaking Japan as the world’s top importer of the fuel for a second consecutive month, ship tracking data from Refinitiv Eikon showed on Tuesday (Jan 7).

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China imported 7.198 MMT of LNG in December, up nearly 16% from November, while Japan shipped in 6.574 MMT last month, up nearly 7% from the previous month, the data showed. China only slightly overtook Japan’s volumes of LNG imports for the first time in November, but greatly exceeded its neighbour’s volumes in December, according to the data. Both countries have yet to release official monthly data and shipping data fluctuates. But analysts say this reversal will not last beyond winter. “I assume the reversal is due mainly to a seasonal boost in LNG demand from China, but the long-term trend of weakening LNG demand in Japan to reflect increasing renewable energies and restarts of more nuclear power plants was also behind,” said Hiroshi Hashimoto, senior analyst, head of gas group at the Institute of Energy Economics, Japan (IEEJ). While Japan is still the world’s leading LNG importer in terms of annual volumes, China will overtake Japan early this decade, Wood Mackenzie said. Japan’s energy demand has been falling due to an ageing population and competition from other sources, such as nuclear power, while China’s gas demand has soared because of a government push to move residential and industrial energy users off coal-fired power and heating to natural gas to cut pollution. “While both Chinese and Japanese gas demand peak during winter, China’s gas demand typically experiences a greater seasonal swing due to its strong gas requirements for heating, particularly with the ongoing coal-to-gas switching in northern China,” said Alicia Wee, LNG analyst at consultancy FGE. China’s LNG imports in December likely surged because of the arrival of term volumes buyers committed to previously and spot volumes purchased earlier in the year, rather than a sudden rise in domestic demand, traders have said. Competition from cheaper coal and the ramp-up of gas flows from Russia to China through the new “Power of Siberia” pipeline could also slow the pace of LNG imports this year. “China will eventually exceed Japan to become the largest LNG importer, yet the inflow of Russian pipeline gas from the Power of Siberia, faster domestic gas ramp up and gas demand creation slowdown have added uncertainty to the timeline,” said Miaoru Huang, a senior manager at Wood Mackenzie. 

Source: LNG Global/Reuters

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Australia tops Qatar as world’s biggest LNG exporter

Australia has overtaken Qatar to become the world’s top exporter of liquefied natural gas, shipping 77.5 MMT in 2019 with an export value of $49 billion as the fuel becomes increasingly important in the global energy mix.

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The figures, released on Monday by energy consultancy EnergyQuest, show Australia’s liquefied natural gas (LNG) shipments for the 2019 calendar year increased 11.4% on the previous year’s exports, primarily due to the growth in the Ichthys project operated by Japan’s INPEX in the Timor sea. The surge follows a succession of massive LNG projects to begin production in Australia in the past decade including by ASX-listed Woodside Petroleum and Santos and other global operators such as Royal Dutch Shell and Chevron. “We have previously achieved the global title in some individual months,” EnergyQuest chief executive Graeme Bethune said.

“But 2019 is the first time Australia has topped global LNG export performance on a sustained annual basis.”

While Qatar’s final production figures for 2019 are yet to be released, the country’s output is forecast to be 2.5 MMT lower at 75 MMT, according to EnergyQuest’s analysis. Dr Bethune said Australia’s production capacity was 88 MMT while Qatar’s was 77 MMT. “There is still room to grow,” he said. Western Australia was the nation’s dominant LNG export region, accounting for 57 per cent of shipments, with the Woodside-managed North West Shelf project the largest single contributor. Woodside on Monday said its LNG exports from WA were helping the world transition to a lower-emissions future. “Woodside is playing a significant role in the world’s energy transformation, through managing our own emissions and reducing global emissions by supplying cleaner energy to a world that needs it,” a spokeswoman said.

Source: LNG Global

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Qatar to supply Kuwait with 3 million tonnes of LNG a year

State-run Qatar Petroleum (QP) said it had signed a 15-year agreement to supply Kuwait with up to 3 MMTPA of LNG. Deliveries to Kuwait’s al-Zour port will begin in 2022 to help meet Kuwait’s growing energy needs, particularly

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in the power generation sector, QP said in a joint statement with Kuwait Petroleum Corp (KPC).

Qatar, the world’s top supplier of LNG, plans to boost its production of LNG to 126 MMTPA by 2027. The deal would help Kuwait to meet its requirement for cleaner sources of energy and would contribute to reducing emissions and improving local air quality, Kuwait’s oil minister Khaled al-Fadhel said in the statement. “Whilst KPC is working towards increasing local natural gas production, there remains a pressing need to secure imports of natural gas supplies,” Fadhel said. Kuwait has been boosting its reliance on imported gas to meet power demand, especially in summer when consumption by air conditioning systems rises sharply, but it is also focusing on ramping up gas production as part of its 2040 growth strategy.

Source: LNG Global

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LNG supplies increase in Pakistan

Despite system constraints, the Liquefied Natural Gas (LNG) supplies into the system increased by almost 14% during calendar 2019 over the preceding year and reduced gas shortfall by 20-25pc. The two LNG terminals operating in the country reported

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to have pumped more than 393.6 billion cubic feet (BCF) of gas into the national gas distribution network in 2019 compared to 345.6 BCF of 2018, showing an increase of 14pc, a Petroleum Division official said. He said the lower economic growth rate coupled with higher prices restricted the key consumer groups from taking full advantage of the available terminal capacity. In 2019 the country imported 7.57 MMT of LNG through these terminals which handled 123 LNG cargo ships from Qatar, Australia and other European countries. In 2019, the country’s total gas demand stood at approximately 4,800 MMSCFD, in which more than 20% of gas was supplied through Regasified Liquefied Natural Gas (RLNG) by the two terminals of Engro Elengy and Pakistan GasPort Consortium (PGPC). The LNG cargoes have also witnessed an increase of 14pc in 2019 compared to 108 cargoes in 2018. At present, several parts of Pakistan are facing low gas pressure or zero supply situation with a drop in the temperatures across the country. Different sectors of economy such as power plants, CNG stations, fertilizer plants and textile mills are facing huge production losses due to the gas shortage and the country could lose valuable foreign exchange as export orders may not be completed. Currently, natural gas contributes around 43pc to the country’s energy mix. However, it has been facing gas shortage since 2015 as its indigenous production has not been able to keep pace with the growing demand. For meeting this shortage, the country has been importing LNG which is converted into natural gas by the two LNG terminals. Talking about the recent domestic prices for different fuels in 2019, the official explained that the average price stood at $11.1/MMBtu for RLNG, $12.6/MMBtu for furnace oil, $19.8/MMBtu for Liquid Petroleum Gas, $20.2/MMBtu for High Speed Diesel, and $20.4/MMBtu for mogas(petrol). LNG has proved to be a cheaper solution and saved the country more than $3-4 billion in last four years. However, the situation may be changing now as furnace oil (FO) prices are showing declining trend as refineries in the international market were phasing out furnace oil production. The FO prices are already dropped by almost 25pc in the recent months. The government needs to plan in advance and facilitate obsolete local refineries to upgrade. He said the successful operations of these two terminals and the development of LNG import infrastructure had paved the way for more LNG terminals in the country. Pakistan needs at least three or four more LNG terminals to address its ongoing energy shortage.

https://www.dawn.com/news/1526002/lng-supplies-increase

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Pavilion Energy expands beyond Asia, starts operations in Europe

Singapore gas importer and marketer Pavilion Energy said on Thursday (Jan 10) it has started operations in Europe following its acquisition of gas assets in Spain, in its first major expansion outside Asia. Pavilion completed the purchase of

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Spanish energy company Iberdrola’s liquefied natural gas (LNG) and gas assets on Jan. 1, doubling its portfolio and giving it access to European regasification terminals as well as Atlantic supplies. Pavilion joins other Asian companies looking for more flexibility to buy and trade LNG amid uncertainty over climate policies as countries grapple with the dilemma of using cheaper coal versus more typically expensive but cleaner gas. Pavilion, owned by Singapore state-owned investment company Temasek Holdings, launched its new European headqarters in Madrid and said it has started LNG trading operations as well as supplying natural gas to the United Kingdom and Spain. It appointed Iberdrola’s head of global gas Jose Simon as managing director for Europe, overseeing the company’s European gas trading and global LNG portfolio management and origination business divisions. In Asia, Pavilion appointed Alan Heng as managing director in addition to his current role as head of energy sales and market development division. Pavilion chief executive Frederic Barnau said last year the company expects a turnover of $3 billion this year, with half expected to come from its Europe portfolio and the rest from Singapore.

https://www.reuters.com/article/singapore-pavilion-europe/pavilion-energy-expands-beyond-asia-starts-operations-in-europe-idUSL4N29E0JO

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Japan gas operators sell surplus LNG to China in dribs and drabs

Local Japanese gas companies are shipping unsold inventories to Chinese clients in relatively small amounts now that demand at home has stagnated and parts of China unserved by pipelines are eager to buy. Shizuoka Gas shipped five 18-ton

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containers of liquified natural gas last year to the oil major PetroChina on a trial basis. The Japanese company aims to finalize a three-year supply deal later this year, which will transfer tens of thousands of tons of LNG annually. LNG is normally ferried by large vessels with 70,000-ton capacities. Instead, Shizuoka Gas will parcel out LNG in 18-ton containers to fulfill a demand in China for smaller purchases that has been growing for the past two or three years. Because many areas in China have no access to pipelines, a large number of traders use trucks or small ships to transport the fuel in the containers. In 2018, Shizuoka Gas spent roughly 15 million yen ($138,000) to install LNG container loading equipment. In Shizuoka Gas’s home in Shizuoka Prefecture, demand for gas has dropped off mainly because of factory closures. Shizuoka Gas signed long-term contracts to purchase roughly 1.2 million tons of LNG a year, but sells only 1 MMT in Japan annually. That leaves 100,000 tons to 200,000 tons of surplus LNG each year. Shizuoka Gas’s three-year plan is to sell about 100,000 tons annually in containers to small-lot clients in China and elsewhere. Chubu Gas also sold LNG to China in containers last year in trials. Domestic trading house Mitsui & Co. aided in the marketing. Chubu Gas signed long-term LNG purchasing agreements, but the utility is losing customers to Kyushu Power, which started selling natural gas after the market was deregulated. To offset this, Chubu Gas will sell unsold LNG to China. Reselling LNG has become necessary to mitigate extra costs that come with shrinking demand. LNG purchasers are normally required to pay breach of contract fees if they do not claim agreed-upon volumes. Resales have mounted especially among rural gas companies. Periphery businesses have flourished. Trading house Mitsubishi Corp. buys surplus LNG from Japanese power and gas companies and sells the fuel to PetroChina, Sinopec and China National Offshore Oil Corp — China’s three biggest oil majors. Such trades have reportedly proliferated. Mitsubishi’s trading business, which began in 2013, processed nearly 3 MMT of LNG spot trades in fiscal 2018, or three times the volume in fiscal 2017. What was once a roughly 20-person trading desk two years ago has expanded to about 80, forming one of the biggest teams in Japan.

https://asia.nikkei.com/Business/Energy/Japan-gas-operators-sell-surplus-LNG-to-China-in-dribs-and-drabs

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Natural Gas / LNG Utilization

EBRD allocates 7M euros to help Serbian city deploy CNG bus fleet

The European Bank for Reconstruction and Development (EBRD) is financing improvements to public transport in Novi Sad, Serbia’s second largest city, with the first project under the EBRD Green Cities program in an effort to tackle environmental challenges in the city.

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A €7 million loan agreement, which was signed by the EBRD and the Public Transport Company of Novi Sad, will allow the company to purchase new buses that run on natural gas, which significantly reduce pollution emissions. “We are pleased that we are stepping up our cooperation with Novi Sad with the first signed project under the EBRD Green Cities. New buses will help reduce air pollution while providing better quality transport for citizens of Novi Sad. We will continue to support the city in its efforts to create better environment and quality of services,” said Zsuzsanna Hargitai, EBRD Regional Director, Western Balkans. This project is part of the wider ongoing bus fleet renewal, which the company started earlier this year. The new CNG buses financed by the EBRD will be in use from 2020 and they will contribute to the significantly improved quality, reliability and attractiveness of public transport. They will replace part of the old diesel bus fleet and will serve citizens on the busiest urban bus routes in the city, thus reducing CO2 emissions by at least 70%. They will also be equipped with wheelchair lift access and allocated areas for disabled people. EBRD Green Cities is a program that helps cities articulate a sustainable development vision and the strategic investments necessary to address priority environmental issues. Each city develops a Green Cities Action Plan, which identifies and prioritizes their most pressing environmental challenges. Novi Sad is the second city in Serbia to join EBRD Green Cities, alongside Belgrade.

http://www.ngvjournal.com/s1-news/c3-vehicles/ebrd-allocates-7m-euros-to-help-serbian-city-switch-to-cng-bus-fleet/ 

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LA Metro adds 70 CNG buses to L.A. County fleet, part of Vision 2028 Plan

New Flyer of America Inc. announced the Los Angeles County Metro Transit Authority (LA Metro) has exercised options for 70 Xcelsior® 60-foot, CNG buses, for a total of 140 equivalent units converted from the backlog. The options are part of a contract

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with LA Metro for up to 400 CNG buses which was originally announced in October 2017, and includes an initial order of 65 buses with options to purchase an additional 335 buses. LA Metro is the United States’ third-busiest transit agency and is the largest transit agency in L.A. County. “Since 1998, New Flyer has proudly delivered nearly 1,500 buses to LA Metro to provide greater mobility options through public transit. Our CNG buses continue to provide safe, clean, and reliable transit while helping the people of L.A. County move through their community each day,” said Chris Stoddart, President, New Flyer. “We commend LA Metro on its continued pursuit of sustainable and zero-emission mobility and look forward to assisting the achievement of 100% zero-emission transit over the new decade.” Xcelsior CNG buses conform to the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) Comprehensive Heavy-Duty National Program standards, reducing fuel consumption for heavy-duty highway vehicles. This low-emission CNG option also works to combat global climate change and aggressively reduce greenhouse gas (GHG) emissions from heavy-duty vehicles.

http://www.ngvjournal.com/s1-news/c3-vehicles/la-metro-adds-70-cng-buses-to-l-a-county-fleet-part-of-vision-2028-plan/

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Two new CNG stations open in California to serve school bus fleets

The Mobile Source Air Pollution Reduction Review Committee (MSRC) closed out 2019 by joining two of its school district project partners in the grand opening events for their new CNG fueling stations in the South Coast region. For both stations,

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at least 50% of the natural gas dispensed must be renewable natural gas, helping reduce climate pollution and enhancing the diversity of the fuel supply. In November, MSRC Contracts Administrator Cynthia Ravenstein was on-hand to participate in the Moreno Valley Unified School District’s ribbon cutting ceremony for its new CNG station. With the help of $200,000 in Clean Transportation Funding from the MSRC, the school district invested in the limited-access facility to support its fleet of nearly 30 CNG school buses. In December, the Mountain View School District, located in the community of El Monte, opened a new limited-access CNG station. Ravenstein and Matt MacKenzie, MSRC Contracts Assistant, were there to celebrate the MSRC’s grant of $275,000 which helped fund the construction of the station. School Board members and staff remarked that the new infrastructure will not only help clean the air but also save significant staff time resources since drivers used to have to take their buses to a distant fueling station. The new station will also mean the buses can receive a more complete fill and travel farther with students once they are fueled up.

http://www.ngvjournal.com/s1-news/c4-stations/two-new-cng-stations-open-in-california-to-serve-school-bus-fleets/

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California, 15 other states question safety of shipping liquefied natural gas by rail

The Trump administration’s plan to allow liquefied natural gas to be shipped by rail, in trains with as many as 100 tanker cars, lacks essential safeguards and exposes communities nationwide to the risk of lethal fires and explosions, representatives of California and other states said Monday (Jan 13).

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The highly flammable substance known as LNG is now transported mainly by truck. Urged by railroads and gas producers to increase the volume of lucrative shipments for both domestic and foreign consumption, President Trump issued an executive order in April to allow transportation by rail. The Department of Transportation, in regulations posted in October, found little risk of a serious accident and no significant danger to the environment.  But California, 14 other states and the District of Columbia said the proposal lacks basic safety requirements — limits on train speeds and routes, braking specifications, safety training for crews — and would put their populations “at greater risk of catastrophic accidents.” The rule would allow LNG “to be transported through densely populated areas, potentially in unit trains of up to 100 tank cars operated by just one person, on the same rail lines used by high-speed passenger trains,” the states said in a letter to the Department of Transportation. The letter urged the department to withdraw the rule, conduct safety studies and prepare an environmental impact statement, which the department had found unnecessary. California Attorney General Xavier Becerra said the Trump administration had “bowed to industry requests to put aside the safety of millions of Californians who live, work, and attend schools near the routes of these dangerous trains. “Skip Elliott, administrator of the Transportation Department’s Pipeline and Hazardous Materials Safety Administration, says the regulation “will establish a safe, reliable, and durable mode of transportation for LNG, while substantially increasing economic benefits and our nation’s energy competitiveness in the global market.” Liquefied natural gas is stored at 260 degrees below zero, greatly reducing the space needed for storage and transportation. It is less polluting than coal or oil and allows efficient transportation of natural gas produced by hydraulic fracturing, or fracking. But LNG can become a flammable and explosive gas when it becomes airborne, which could occur after an accident involving a tank car. The states’ letter noted that the National Transportation Safety Board, in critical comments on the proposed rule last month, said the trains of tank cars that would carry the LNG “have no operational or accident performance safety history.” The safety board called for a series of protective measures, such as a 40 mph speed limit for tank cars passing through “high-threat urban areas,” including the San Francisco Bay Area, Sacramento, Los Angeles and others in California. More criticism came from the National Association of State Fire Marshals and the International Association of Fire Fighters, which cited the lack of safety training and equipment. The 320,000-member Fire Fighters’ Association said the Department of Transportation, while denying that the rail shipments posed a danger to the public, had issued an Emergency Response Guide saying an LNG tank fire would require immediate evacuation of one mile in all directions.  In comments submitted last month opposing the shipments, the association urged the federal agency to “place the safety of the public ahead of any political pressures to reduce the burdens of regulation.”

https://www.sfchronicle.com/nation/article/California-15-other-states-question-safety-of-14972486.php

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Snam and Cubogas will build CNG stations for buses in Paris

Snam’s subsidiary Cubogas, which specializes in technological solutions for CNG stations, was awarded tenders to construct two new refueling facilities for RATP, the Parisian transport company operating in the Île-de-France region. This will enable

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Snam and Cubogas to make a tangible contribution to the decarbonization of public transport in Paris by promoting widespread use of natural gas. The orders, which involved a total value of approximately 2 million euros, include the installation of six compressors in locations near the French capital to supply around 400 buses that run in the metropolitan area of Paris using natural gas. The new stations will be up and running by the end of 2020. The RATP plans to build five more CNG stations and set up new environmentally-friendly natural gas buses by 2025. In Italy, Snam wants to set up around 150 new filling stations providing natural gas and biomethane by 2023, with an investment of 50 million euros, strengthening the country’s European leadership in this sector. To date, the subsidiary Snam4Mobility has delivered eight stations and contracted a further hundred. In total, Snam’s investments in sustainable mobility, which also include the construction of two small liquefaction plants (small-scale LNG) for heavy transport, will amount to 100 million euros by 2023.

http://www.ngvjournal.com/s1-news/c4-stations/snam-will-build-cng-filling-stations-for-buses-in-paris/

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LNG as a Marine Fuel/Shipping

Spain, a leader in LNG bunkering

Spain has positioned itself in 2019 as a benchmark in Europe in LNG bunkering. 195 operations have been carried out in which a total of 81,704 m3 of LNG have been supplied to ships. This represents a very significant increase

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with respect to the 60 operations performed in 2018 in which 4,504 m3 were bunkered. Of these operations, 165 have been completed through the truck-to-ship method and 30 via ship-to-ship. The latter have been carried out by four LNG bunker vessels: the Methane Coral of 7,551 m3, the Fraseri Coral of 10,000 m3, the Cardissa of 6,000 m3 and the Engie Zeebruge of 5,000 m3. Moreover, LNG bunkering is gaining flexibility and efficiency in the country through multi-truck-to-ship operations, which are already being carried out in the Ports of Huelva and Valencia. These operations are made with several tanker trucks at the same time, increasing the transfer rate and thus reducing the refueling time. As for the number of ships powered by LNG, there are six in Spain, four ferries and two cruise ships, while in the next two years there will be at least 11 vessels of these characteristics in the country. On the other hand, 175 LNG-fueled ships are already operating in the world while 139 are LNG-ready, which represents an increase of 22% compared to 2018. According to a recent study commissioned by Gasnam and prepared by DNV that analyzes nine types of vessels, LNG is the most economical option for ships with a high fuel consumption, such as RoPax, containerships and cruise ships.

http://www.ngvjournal.com/s1-news/c7-lng-h2-blends/spain-a-leader-in-lng-bunkering/

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Positive outlook for Korean shipbuilders in 2020 with new sulfur cap

Korean shipbuilders, which secured over a third of new orders placed around the globe last year, are expected to lead the global industry in 2020 as well, especially with the new maritime cap regulating sulfur emissions, according to industry

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sources on Tuesday (Jan 7). Five prominent Korean shipbuilding companies recorded a combined $26.2 billion in 2019, fulfilling 81% of annual targets, industry data showed. Hyundai Heavy Industries won $12 billion in new orders to build 135 ships, achieving some 76% of its order target. Daewoo Shipbuilding & Marine Engineering clinched $6.11 billion worth of orders to build 33 vessels, reaching 73% of its annual order target. Samsung Heavy Industries built 44 ships to bag $7.1 billion, which is 91% of its order target. South Korea topped the list of countries to secure the most new orders with 9.43 million compensated gross tons, among 25.3 million CGT, or 37 percent of deals placed around the world, according to data from Clarkson Research. As a new regulation is implemented to reduce sulfur oxide release into the air, starting this year, demand for liquefied natural gas-powered vessels is expected to surge, placing Korean companies in a more favorable spot in the market, according to industry sources. With the new regulation in place, shipowners have had to come up with ways to meet the new standard, such as using more expensive low-sulfur fuel oil, replacing vessels with those powered by liquefied natural gas or installing on-board scrubbers to abate sulfur emissions. Korean shipbuilders hold a firm foothold in constructing LNG-powered ships. In 2018, Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries clinched all orders worldwide placed for 38 LNG-powered vessels.

https://www.hellenicshippingnews.com/positive-outlook-for-korean-shipbuilders-in-2020-with-new-sulfur-cap/

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High-efficient natural gas bunkering method unveiled in Port of Valencia

Baleària shipping company has launched a high-efficiency LNG supply in the port of Valencia, thanks to the Multi Truck to Ship (MTTS) system, in which several trucks operate simultaneously to supply fuel to the ship. Following the successful completion of the test

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with this system, the shipping company will use this new method daily, after the approval of the Port Authority of Valencia, which guarantees the complete operation of ships running on LNG in that port. The MTTS system enables several tank trucks to simultaneously supply the chilled fuel to vessels. For this, the shipping company uses a collector manufactured by Kosan Crinsplant, which was optimized for this specific operation by the engineering company Cotenaval, as well as tank trucks of the logistics company ESK. During the test, natural gas was supplied to Baleària’s Hypatia de Alejandría, which currently covers the route between Valencia, Ibiza and Palma. The transfer speed with this system ranges between 80 and 120 m3/h, depending on the pumping characteristics of the tanks used. The simultaneous supply of several tank trucks to ship is faster than the usual method, known as Truck To Ship (TTS), in which it can only supply a single tank and usually reaches a discharge speed between 30 and 50m3/h; a logistical difficulty that adds to the limited times vessels spend in the port and that the MTTS method allows to correct. It should be noted that Baleària carried out in November, in the port of Huelva, the first MTTS LNG bunkering in Spain. The Hypatia de Alejandría ferry, which is 186 meters long and can navigate 24 knots, has two LNG storage tanks with a volume of 330 m3. Incorporated in January 2019, it was the first Baleària ship to sail with LNG.

http://www.ngvjournal.com/s1-news/c7-lng-h2-blends/innovative-natural-gas-bunkering-system-launched-in-the-port-of-valencia/[Edited]

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Hindustan Petroleum starts supply of IMO 2020 compliant low sulphur fuel

India’s Hindustan Petroleum Corporation Limited (HPCL) has announced that it has made available its supply of IMO 2020 compliant bunker fuel for the shipping industry. The first batch of HPCL’s 0.5% very low sulphur fuel oil (VLSFO)

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was produced in Visakh Refinery in early December 2019. HPCL owns and operates two major refineries located in Visakhapatnam on the east coast and Mumbai on the west coast. Major Chinese bunker suppliers ink VLSFO procurement deals for IMO 2020. “The product meets the Residual Marine Grade (RMG) 0.50 Specification and ISO 8217:2017 standard requirements,” said Mukesh Kumar Surana, chairman and managing director of HPCL. “This fuel also meets all quality guidelines detailed by the International Organisation of Standardisation in its recently released ISO 23263:2019 standard,” he added. From 1 January 2020, the IMO has enforced a 0.5% global fuel sulphur content cap on all ocean-going ships. The sulphur content cap was lowered from 3.5% previously. Separately, Indian Oil Corporation’s (IOC) Gujarat oil refinery and Haldia refinery have also started supplying IMO 2020 compliant bunker fuels since October and December last year, respectively. India’s marine fuel demand is estimated at about 1 MMT per year.

https://www.seatrade-maritime.com/bunkering/hindustan-petroleum-starts-supply-imo-2020-compliant-low-sulphur-fuel

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Shipping fuel regulation to cut sulphur levels comes into force

New rules introduced by International Maritime Organisation expected to reduce certain forms of air pollution Sulphur will be cut drastically from global shipping transport fuels in 2020, in a move that should reduce some forms of air pollution,

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and may help towards tackling the climate emergency – but which could also lead to a rise in the price of flights. From 1 January 2020, ships will only be allowed to use fuel oil with a very low sulphur content, under rules brought in by the International Maritime Organisation. This cut in sulphur content has been more than a decade in the planning, and almost all shipping around the world is expected to comply, or face penalties. “Member states, the shipping industry and fuel oil suppliers have been working for the past three years to prepare for this major change – I am confident that the benefits will soon be felt and that implementation will be smooth,” said Kitack Lim, the secretary general of the IMO. “This [is a] hugely important change which will have significant positive benefits for human health and the environment.” Moving to cleaner fuels could add substantially to costs, from an estimated $400 (£303) a tonne for fuel oil today to as much as $600 a tonne, according to the International Chamber of Shipping. Higher shipping costs may be absorbed throughout the manufacturing and transport supply chains. The cost impact may also spread beyond shipping, according to the energy analyst firm Wood Mackenzie. “Knock-on effects from the cap on sulphur emissions in marine bunker fuel could even wind up giving you a more expensive plane ticket in 2020,” the company said. The IMO estimates that the new limit – of 0.5% sulphur content compared with the previous limit of 3.5%, enforced under the international convention for the prevention of pollution from ships – will cut sulphur oxide emissions from ships by 77%, an annual reduction of about 8.5m tonnes. Fuel oil for shipping has long been one of the dirtiest forms of fossil fuel, made up of the sort of low-value and cheap crude oil that is unsuitable or expensive to refine into high-grade products such as petrol for cars, or kerosene for planes. Ship engines have been designed to cope with such low-grade fuel, and the emissions they belch out as a result mostly happen far from land, making the accompanying pollution less visible and, for many decades, largely ignored by governments. But the damaging effects of the pollution have grown as globalisation has led to a massive increase in shipping transport. Shipping consumed about 3.8m tonnes of fuel oil a day in 2017, according to Wood Mackenzie, equivalent to half of global fuel oil demand. Carbon from shipping makes up about 3% of global total carbon emissions, but is expected to rise to 17% by mid-century. Fuel oil with a high sulphur content produces sulphur oxides, which can cause acid rain and particulate pollution. Alternatives to low-grade, high-sulphur fuel oil are increasingly available, albeit at a higher price. Liquefied natural gas is still a fossil fuel, but much cleaner, and infrastructure allowing its use is becoming more widespread. Biofuels are also being explored as an alternative – one enterprising cruise company is using fish guts for its fuel – and there are high hopes for harnessing hydrogen fuels in the form of ammonia for ship engines. Vessels can also be fitted with “scrubbers” to remove sulphur, though some of this is then released into the sea as effluent. Ports have also become increasingly concerned at the pollutants from cargo and passenger ships, and some operate zones where sulphur content is even more drastically reduced.

https://www.theguardian.com/environment/2020/jan/01/shipping-fuel-regulation-to-cut-sulphur-levels-comes-into-force[Edited]

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Tristar adds LNG tanker to shipping fleet

The vessel will be the first LNG ship to be added to the firm’s fleet of 30 ocean-going tankers. Tristar has added a liquefied natural gas (LNG) tanker to its international shipping fleet. The vessel, named the Tristar Ruby, will be

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the first LNG ship to be added to the energy logistics business’ collection of 30 ocean-going tankers. Formerly known as the British Ruby, the ship will be on a long-term charter with BP Shipping – built by Hyundai Heavy Industries in 2008, it boasts a cargo capacity of 155,000 cubic metres. Eugene Mayne, Group CEO of Tristar, said: “As a group, we are extremely excited with this new opportunity to expand our presence into LNG shipping and look forward to strengthening and growing this new relationship with BP with a strong commitment to safety in operations and high standards of service and excellence.”

https://www.energylivenews.com/2020/01/02/tristar-adds-lng-tanker-to-shipping-fleet/

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Puget LNG joins The Society for Gas as a Marine Fuel

Puget LNG recently joined The Society for Gas as a Marine Fuel (SGMF) as its 150th worldwide member. Puget LNG is already moving ahead to help create a better energy future with the construction of the Tacoma LNG

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Facility, which is expected to be operational in 2021. Once completed the facility will deliver the cleanest fuel choice possible today for shipping in the Puget Sound region, all while reducing greenhouse gas emissions. “The knowledge and experience that is provided by the SGMF will be of great value to us as we prepare to fuel our first ship in 2021,” said Jonathan Harris, the Senior Business Development Manager at Puget LNG. “We look forward to sharing our expertise and implementation of industry best practices and standards through our participation in this organization.” Puget LNG is positioned to be a key supplier of liquefied natural gas (LNG) in the Pacific Northwest with its facility located in the Port of Tacoma. The facility will provide a cleaner fuel alternative to our key customer, TOTE Maritime Alaska, which will fuel their vessels with LNG. Puget LNG is focused on providing customers with a safe, reliable and economic source of LNG for transportation. The plant’s Port of Tacoma location serves as an efficient location for LNG-fueled ships. The facility will have a shared function, providing LNG for Puget LNG’s commercial transportation customers and also providing necessary domestic supply back up for Puget Sound Energy’s natural gas customers (residential, commercial and industrial).

https://www.hellenicshippingnews.com/puget-lng-joins-the-society-for-gas-as-a-marine-fuel/

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

World’s first 100% hydrogen BRT system launched in southern France

Public transport operator Keolis has contributed to the launch of Pau’s 100% hydrogen BRT (Bus Rapid Transit) system, called Fébus, a global first for an 18 meter long vehicle. Inaugurated by François Bayrou, Mayor and President of the

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Pau Béarn Pyrénées intercommunal area, this new service was opened to the public in December. The innovative, sustainable mode of transport serves 14 stations along a six kilometer long dedicated BRT lane and is part of the city public transport network. A long-standing partner of Pau transport operator SPL STAP (Société de Transport de l’Agglomération Paloise), in charge of operating Pau Béarn Pyrénées Mobilités’ city public transport network for 20 years, Keolis has worked on the launch of Fébus, which represents the culmination of the overhaul of the city transport network IDELIS, aimed at modernizing and developing the transport offer to increase the region’s appeal. Thanks to a route which runs 85% of the time on six kilometer long dedicated lanes protected from other traffic, and a priority system at crossroads, the travel time of this key line for getting around Pau is only 17 minutes. Built by the Belgian manufacturer Van Hool, these buses produce their electricity on board, using a hydrogen fuel cell. The hydrogen used to supply energy to the vehicles is produced in the station built near the IDELIS bus depot in Pau. A key asset of hydrogen power, these vehicles emit no pollution – be it noise or atmospheric pollution through greenhouse gas emissions– as the engine emissions are composed solely of water. With their range of 240 km/day, the buses do not need to be refueled while in service. Refueling takes place at night in the station. Accessible to people with reduced mobility, these 18 meter vehicles have a 145 person capacity and include 32 seats and large bay windows that provide passengers with plenty of light. Commissioning this fleet of eight buses required the construction of a hydrogen station, inaugurated in September 2019, as well as a maintenance workshop adapted to using hydrogen. One hundred employees were trained in this project (50 for driving and 50 for maintenance and control).

http://www.ngvjournal.com/s1-news/c7-lng-h2-blends/worlds-first-100-hydrogen-brt-system-launched-in-southern-france/

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Spain: new hydrogen-fueled vehicle prototype to be launched this year

The Catalan company EVARM will present a prototype of a hydrogen-powered car in 2020. It is a vehicle that incorporates the technology developed by EVARM together with the Korean Institute of Science and Technology (Kista), which

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consists of a station that transforms natural gas into hydrogen, allowing CO2 emissions to be reduced by 60%. The initiative, which has a duration of two and a half years, was supported by 200,000 euros of Acció (Generalitat de Catalunya’s agency for business competitiveness). The objective of the project is to investigate alternatives to the use of fossil fuels in the automotive sector. With the developed technology, current vehicles powered by diesel can be used and adapted so that they can run on hydrogen. During the first quarter of 2020, EVARM will present the final design of the prototype of the vehicle and at the end of the year it plans to carry out the first traffic tests in Catalonia. Under the project, EVARM is also exploring how to obtain LNG from sustainable sources. This same gas can be also transformed into hydrogen using the station developed by Kista. The project also has the collaboration of the company Enagás, which works on different projects to promote technologies that accelerate the energy transition. To analyze this extremely positive scenario for renewable energies and sustainable mobility, and evaluate the latest technological developments in alternative fuels, AltFuels Iberia 2020 will be held on 5-9 October at IFEMA Trade Fair Center in Madrid. The event will feature first level conferences and exhibition of vehicles of all kinds, refueling stations, components, plants, and road and marine engines, among other things, with multiple networking and business options. For more information, please contact info@altfuelsiberia.com.

http://www.ngvjournal.com/s1-news/c7-lng-h2-blends/spain-new-prototype-hydrogen-powered-vehicle-to-be-launched-this-year/[Edited]

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Hydrogen injected into gas network – first for UK

The UK’s first live pilot to inject zero-carbon hydrogen into a gas network to heat homes and businesses is now fully operational. HyDeploy is a ground-breaking green energy trial at Keele University, Staffordshire that could help

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Britain cut its carbon emissions and open the door to a low-carbon hydrogen economy. The HyDeploy demonstration is injecting up to 20% (by volume) of hydrogen into Keele University’s existing natural gas network, feeding 100 homes and 30 faculty buildings. The 20% hydrogen blend is the highest in Europe, together with a similar project being run by ENGIE in Northern France. Backed by Ofgem’s Network Innovation Competition, the £7 million project is led by Cadent in partnership with Northern Gas Networks, Keele University, the Health and Safety Executive (HSE) Science Division, integrated hydrogen energy systems manufacturer ITM-Power, and independent clean energy company Progressive Energy. If a 20% hydrogen blend was rolled out across the country it could save around 6 million tonnes of carbon dioxide emissions every year, the equivalent of taking 2.5 million cars off the road. When burned, hydrogen creates heat without carbon dioxide. The Committee on Climate Change has determined that the use of hydrogen in our energy system is necessary in order to reach Net-Zero. Heating for domestic properties and industry accounts for half of the UK’s energy consumption and one-third of its carbon emissions, with 83% of homes using gas to keep warm. The 20% volume blend means that customers can continue to use their gas supply as normal, without any changes being needed to gas appliances or pipework, while still cutting carbon emissions.

Source: smart-energy.com [Edited]

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