NGS’ NG/LNG SNAPSHOT – MAY 2020, VOLUME 1
National News Internatonal News
NATIONAL NEWS
City Gas Distribution & Auto LPG
City gas distribution bidding: 80 force majeure requests flood PNGRB
Downstream regulator Petroleum Natural Gas and Regulatory Board (PNGRB) has got at least 80 requests for force majeure from the ninth and tenth round
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of city gas distribution (CGD), in which 41 companies participated. According to multiple sources close to the development, the big firms that applied for force majeure include Adani Gas, Gail Gas, Indian Oil Corporation, Indraprastha Gas, Haryana City Gas, and Torrent Gas. Some companies, including Adani Gas, approached the regulator seeking an extension of at least 12 months on deadlines in starting of commercial operations under the allotted geographical areas. “The regulator is considering the request from the CGD entities. PNGRB has not yet decided on the timeline of extension. We will have to discuss it with the banks,” said a government source. The eight-year deadline for ninth round was kept at September 30, 2026, and that for the tenth round was March 31, 2029. The two rounds of bidding are expected to see investments to the tune of Rs 1.2 trillion by 2030 – of which Rs 70,000 crore for 86 geographical areas (GA) is likely to happen under the ninth round and another Rs 50,000 crore for the 50 GAs awarded under the tenth round in March 2019.
https://www.energyinfrapost.com/city-gas-distribution-bidding-80-force-majeure-requests-flood-pngrb/
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Hyundai India launches CNG version of the BS6 Grand i10 NIOS
The BS6* Hyundai Grand i10 NIOS family recently added a CNG option. The new car features a bi-fuel (gasoline/natural gas) version of the 1.2-litre
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Kappa naturally aspirated four-cylinder engine. Running on CNG, this engine produces a maximum power of 69 PS at 6,000 rpm and a maximum torque of 95 nm at 4,000 rpm. A 5-speed manual transmission sends drive to the wheels. The Hyundai Grand i10 Nios CNG has a 60 liter (water equivalent) CNG tank. Its petrol tanks capacity, like that of the petrol variant, is 37 liters. Hyundai offers the Grand i10 Nios CNG in Magna and Sportz trims. The Magna trim includes features like wheel covers, electrically adjustable ORVMs (outer rear view mirror), 2-DIN audio system with Bluetooth connectivity, USB port and iblue app support, steering wheel mounted audio controls, all four power windows with auto-down function for the driver window and height-adjustable driver seat. The Sportz trim’s equipment highlights include 14-inch gunmetal finish alloy wheels, shark fin antenna, 5-inch digital speedometer with MID, 8-inch touchscreen infotainment system with Apple CarPlay, Android Auto and voice recognition and automatic climate control. On the safety front, both versions include central locking, dimmable IRVM (inside rear view mirror), rear parking sensors, dual-front airbags, ABS with EBD, front SBR (seat belt reminder), speed alert system, speed sensing auto door lock, impact sensing auto door unlock, among other features.
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India Automotive CNG/LPG Kit Market is expected to grow at a CAGR of over 7.77% from 2020-2026
According to Blue Weave Consulting Indian Automotive CNG &LPG kit Market has reached USD 5.15 Million units in 2019 and projected to expand with a growth rate of 7.77%,
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in Volume terms, during 2020 to 2026. The market is expected to generate a revenue of USD 8.68 million units by 2026. With a large number of Indian cities embarking for cleaner fuel, CNG is gaining momentum in the Indian automotive market. Factors contributing to this growth include increasing demand for more economical fuel compared to conventional fuels and rising demand for environment-friendly fuel to decrease intensifying pollution levels in cities in India. Major automakers have also started integrating LPG and CNG fuel systems into their latest models. CNG tanks need storage space, the CNG cylinder can be substantial, the tank’s added weight offset by a petrol fuel’s reduced weight. The vehicle’s output after installation of the CNG / LPG package is significantly lowered. Such factors related to the CNG / LPG package are becoming restrictive in the growth of the CNG / LPG kit sector in the Indian automotive industry. CNG segment in automotive CNG/LPG kit market is expected to dominate during the forecast period from 2020-2026 across the region. In four years, demand for compressed natural gas (CNG) increased by 50% as a result of a combination of the Modi government’s drive to popularize less polluting fuel, increase filling stations, lower gas prices, and the launch of several CNG vehicles by car manufacturers. Key factors leading to this growth include growing demand for more economical fuel compared to conventional fuels and increasing demand for environmentally friendly fuel to minimize the increasing levels of pollution in cities in India. The growth in CNG and LPG kits in the automotive industry can be attributed to increased use of alternative fuel for cost-effectiveness, fuel efficiency and emission control. In practice, the financial superiority of Autogas over other fuels depends mostly on two factors: the net cost of converting an existing gasoline vehicle (or the added cost of buying a factory-built Autogas vehicle compared to the equivalent of Petrol or Diesel) and the price of the Auto-gas pump relative to diesel and Petrol. The major market players in the Automotive CNG/LPG Kit are Maruti Suzuki, Hyundai Motor, Mahindra & Mahindra, TATA Motors Limited, Bajaj, Piaggio, General Motors, Honda Motor Co. Ltd., Ford Motor, Toyota Motor Corporation, Ashok Leyland, and Other Prominent Players are expanding their presence in the market by implementing various innovations and technology.
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PNGRB plans to extend deadlines for city gas projects hit by lockdown
Deadlines for city gas projects will be extended to avoid penalising companies for delays caused by the nationwide lockdown, the head of downstream regulator has said.
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This would help more than a dozen companies implementing 136 city gas distribution projects across the country. “We can on our own extend the timeline. Companies would want that,” DK Saraf, chairman of the Petroleum and Natural Gas Regulatory Board, told ET. “We have to be helpful to the industry.” The board will decide the quantum of extension after consultations with the industry. The regulator had issued about 136 new city gas distribution licences over the past two years, picking winners primarily on the basis of the work pledged, including the number of piped gas connections, natural gas stations and length of the proposed pipeline. The companies are penalised for missing annual work programme targets they proposed during bidding. The lockdown has disrupted pipe-laying and other efforts at setting up infrastructure by city gas companies. “Once the lockdown is lifted, city gas projects should not take too long to revive. But bringing back labour would be a very big challenge,” Saraf said. “A big share of migrant workers has gone back home. Families will not permit workers to return to the cities until they have the confidence that the health risk due to coronavirus has receded.” Projects that have already been completed or are nearing completion will face the challenge of lower energy demand. “Until industrial activity picks up, energy demand will remain low,” Saraf said. “Lower gas prices will, however, have a soothing impact on the economy.” Gas prices have crashed across the globe. Imported liquefied natural gas has fallen below $3 per MMBtu while the domestic gas price is down to $2.39 per MMBtu. The regulator is also considering offering city gas licenses in a new auction. “When the lockdown is over, we will have to see how we can contribute to job creation. We will have to see which new projects can be initiated that can push up economic activity,” said Saraf. Some activity in the city gas sector can result in demand for steel pipes and create income for workers, which would boost consumption, he said.
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Agility Fuel Solutions triple range for CNG Buses in India
Mr. Dharmendra Pradhan, India’s Minister for Petroleum and Natural Gas, launched India’s first long distance compressed natural gas (CNG) bus
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on December 24, 2019 under a strategic program led by Indraprastha Gas Limited (IGL), the largest CNG distribution company in India. The launch ushers in CNG as the fuel of choice for long distance transportation in India. The Honorable Minister speaking on the occasion complimented Agility Fuel Solutions and urged the Indian automotive and fleet industry to implement long distance travel solutions with CNG. Present at the launch were Dr. M.M. Kutty, Secretary, Ministry of Petroleum & Natural Gas, Govt. of India, Mr. Gajendra Singh, Director, GAIL, Mr. Ranganathan, MD, IGL and Mr. Manoj Chugh, President, Mahindra & Mahindra Ltd. 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. 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. CNG buses also get better mileage and have lower maintenance costs.
https://www.ngvglobal.com/blog/agility-fuel-solutions-triple-range-for-cng-buses-in-india-0114[Edited]
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.Electric Mobility& Bio- Methane
BYD Toyota EV Technology Co launched-operates in May 2020
The joint venture between a Chinese automaker BYD Company (BYD) and Toyota Motor Corporation was announced on November 7, 2019,
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to conduct research and development of battery electric vehicles (BEVs). But now it has announced that they are into preparations to commence the operations in May 2020.
The registration of the new company has been done and the new company is named as BYD Toyota EV Technology (BTET). Its chairman will be from Toyota, Hirohisa Kishi and Zhao Binggen from BYD will be the chief executive officer (CEO). The company’s new chairman said that both the companies engineers will work together at the same place and we aim to develop BEVs that gives higher performance and will meet the needs of the customers in China by collaborating the two companies strength. CEO Zhao Binggen said that they will focus on the research and development of electric vehicles with technology from both China and Japan. The company will promote high-quality technology, more eco-friendly, safe, comfortable and intelligent.
He said that their vision is to create a future customer-first mobility style and harmonious society for humans and nature. Recently, Toyota and Panasonic have joined their hands to form a joint venture specialising in automotive prismatic batteries for electric vehicles. It has also unveiled ‘Vellfire’ a new luxurious self-charging hybrid electric vehicle in India. It delivers a powerful driving experience with lesser fuel consumption and carbon footprints. We can call it as a strong hybrid vehicle.
Source: electricvehicles.in
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Gensol Engineering wins multiple tenders
Solar design & engineering company, Gensol Engineering Ltd, announced that the company has recently won tenders from a few reputed clients. In a BSE
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filing made on April 14, the company informed that they have bagged orders from Central Electronics Limited (CEL), Reserve Bank of India (RBI), Bihar Renewable Energy Development Agency (BREDA), Hindustan Petroleum Corporation Limited (HPCL) and Gas Authority of India Limited (GAIL). Detailing about the projects, Gensol Engineering stated that the project won from CEL is worth Rs 19.87 crore and it’s for setting up of an aggregate 13.2 MWp solar capacity in Maharashtra. Meanwhile, the company will also build an aggregate 3.2 MWp rooftop solar capacity at various locations of GAIL across India. This project is worth Rs 13.90 crore. Besides, other projects secured by the company includes 500 kWp grid-connected floating solar under capex model for BREDA, 2 MWp grid-connected solar plant in Bengaluru for HPCL and 100kWp in Mumbai for RBI. Gensol Engineering Ltd provides renewable energy project development services and is also engaged in the construction of solar plants in India. At 3.18 pm on Wednesday, the stock of Gensol Engineering Ltd is trading at Rs 85.00, up by 1.01 per cent against its previous close of Rs 84.15. Its 52-week high is recorded at Rs 89.50 while, its 52-week low is Rs 77.50 on BSE.
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Gas/ Pipelines/ Company News
Self-certification of oil discovery allowed
Field development plans will be deemed to be approved on the expiry of 30 days of submission of documents under self-certification.
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The government has simplified procedures for oil and gas exploration and production by providing for self-certification for a host of compliance, such as discovery notification and deemed consent for investment in fields in a stipulated time. With a view to make it easier to do business, the government has provided that notification of a discovery and tests to confirm them will not require approval and documents will be accepted on self-certification basis, according to the notification issued on April 25. Work programme and field development plan or their revisions will be deemed to be approved on the expiry of 30 days of submission of documents under self-certification. The only areas requiring government nod will be grant of petroleum exploration or mining licence, transfer of stake and extensions. The directorate general of hydrocarbons (DGH) has issued a detailed notification, simplifying the procedures and processes under the production sharing contract (PSC) for pre-Nelp and Nelp oil and gas blocks. Almost all of India’s oil and gas production comes from either areas given to state-owned ONGC and Oil India on a nomination basis or awarded to companies such as Reliance Industries and Cairn in bid rounds since 1990s. “Ease of doing businesses is one of the focus areas of the government in the exploration and production (E&P) sector, with the objective to increase investment and production,” the DGH said in the April 25 order. The areas or blocks awarded under the New Exploration Licensing Policy (Nelp) since 1999 such as RIL’s KG-D6 or fields given away in pre-Nelp bid rounds such as Cairn’s Rajasthan oil block will benefit from the easing of rules. As many as 22 processes will get approvals on a self-certification basis such as information of discovery, potential commercial interest, bank guarantee, notification of discovery confirmation test, inventory report and submission of data.
https://www.telegraphindia.com/business/self-certification-of-oil-discovery-allowed/cid/1768366
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Daimler India ties up with HPCL to serve stranded drivers
Daimler India Commercial Vehicles, a 100 per cent subsidiary of Stuttgart-based Daimler, on Tuesday (April 21) said it has tied up with oil major Hindustan Petroleum Corporation Ltd
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to support stranded drivers engaged in transporting essential goods. The company said it also extended two-month extension of vehicle warranty for all its BharatBenz truck and bus customers. “Even during the lock-down some of our BharatBenz customers are transporting essential commodities. To support them in turn, we decided to extend both service and warranty repairs by two months,” DICV, Managing Director, Satyakam Arya said. Arya who is also the DICV’s CEO said, the company has tied up with HPCL to support stranded drivers. “Drivers who are on the road can dial the toll free number 1800-120-380380 and request basic support”, he said. The company after collecting the requirements of the driver would pass it on to the nearest HPCL team to offer the necessary support. BharatBenz vehicles with warranty contracts ending between March 15 and May 15 have an additional two month period. Daimler India has made an investment of more than Rs 5,500 crore.It has an 440-acre manufacturing facility at neighbouring Oragadam producing a range of trucks and buses for the domestic and overseas markets.
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GAIL says in readiness to start project execution post lockdown
State-owned gas utility GAIL India Ltd on Saturday (April 18) said it is in readiness to resume construction of various hydrocarbon infrastructure
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projects of national importance post lifting of the COVID-19 lockdown. “In order to kick start the crucial infrastructure projects to enable expansion of the gas based economy, GAIL along with its subsidiary and joint venture companies has chalked out catch-up plans for various locations and work fronts to ensure timely completion and avoid any slippages,” the company said in a statement here. Before the March 25 nationwide lockdown stopped all construction activities, GAIL was building multi-crore gas pipelines to connect fuel sources with consumption centres as well as setting up city distribution networks to sell CNG to automobiles and piped cooking gas to households. Detailed SOPs / protocols have also been devised for ensuring hygiene and social distancing norms, promoting use of masks at the project sites and work stations in compliance with the instructions/ guidelines issued by the Government of India, it said. In parallel, GAIL has also maintained safe and uninterrupted supplies of LPG to oil marketing companies and natural gas to the crucial downstream utilities such as fertilizer, power, refineries and city gas distribution, the statement said. “Management of the company is in regular communication with the nodal ministry to seek guidance on issues requiring support for resuming full-fledged activities, post the phase of lockdown. Key stake holders are also kept informed on the current developments as well as the proposed line of action under GAIL’s complete readiness plan for returning to normalcy in the near term,” it said. Besides ensuring operational commitments, GAIL and its employees have been at the forefront in fighting this disease by contributing about Rs 54 crore to the PM CARES Fund. In addition, GAIL has so far provided support aggregating over Rs 3.5 crore to various district administrations across the country for procuring PPE, ventilators, masks and other medical equipment. Distribution of food packets and ration kits are also being undertaken for extending immediate support to the marginalised and needy sections of the society at many locations, it added.
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India’s natural gas production falls 14% in March as demand dries up, 2019-2020 production lowest in 18 years
According to a report by the oil ministry natural gas production by Indian E&P players had been impacted in March on account of decreased production
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in response to less off take by consumers. The ongoing Covid-19 pandemic has dented the demand of petroleum products in India and also reduced the demand for natural gas, forcing Exploration and Production (E&P) companies to scale down production in March 2020, fresh data sourced from the Petroleum Ministry showed. India’s production of natural gas in March declined 14% to 2,411 Million Standard Cubic Meter (MMSCM), as compared to the corresponding month a year ago. According to a report by the oil ministry natural gas production by Indian E&P players had been impacted in March on account of decreased production in response to less off take by gas power plants, fertilizer plants, industrial customers as well as operational issues faced by E&P companies. The country’s natural gas production during 2019-2020 declined 5% to 31,180 MMSCM, the lowest recorded output in at least 18 years, an analysis of historic data by ETEnergyWorld showed. India’s natural gas production falls 14% in March as demand dries up, 2019-2020 production lowest in 18 years. At least one analyst attributed the declining production to the long gap in auctioning of oil and gas fields in the pre-Hydrocarbon Exploration Licensing Policy (HELP) regime. “Before HELP and DSF rounds, there was no action on licensing for Exploration and Production (E&P) for almost for nine years. The impact of this gap is now being felt in terms of falling production,” Debasish Mishra, Partner, Lead-Energy, Resources and Industrials at Deloitte India told ETEnergyWorld. A former chairman of a large Indian oil producer requesting anonymity had said that overall oil and gas production during 2019-2020 had been impacted due to a host of other issues besides Covid-19 including, protests against privatisation of Bharat Petroleum, protests against Citizen Amendment Bill, maintenance and up gradation activities in Cairn Oil and Gas’ fields.
Production by Oil and Natural Gas Corporation (ONGC), the country’s largest E&P company, in March declined 11 per cent to 1,906 MMSCM, as compared to the corresponding month a year ago. Also, cumulative production during financial year 2019-2020 declined 4 per cent to 23,746 MMSCM, as compared to the year ago period.
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9 years on, Bhatinda-Srinagar gas pipeline awaits completion
The Bhatinda-Srinagar gas pipeline, an estimated Rs 5,000 crore project, is nowhere near completion even nine years after it was announced.
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In its written reply to MP Anantnag, Hasnain Masoodi, the Ministry of Petroleum has said: “Petroleum & Natural Gas Regulatory Board (PNGRB) has authorized 725 km long Bhatinda-Jammu-Srinagar Natural Gas Pipeline (BJSPL) to GSPL India Gasnet Limited (GIGL) which is developing the authorized pipeline project. PNGRB has informed that about 102 km long pipeline section from Jalandhar-Amritsar in Punjab as a part of BJSPL has been commissioned.” The PNGRB on 7 July 2011 had authorized GSPL, a subsidiary of the Gujarat Government to lay Bhatinda-Jammu-Srinagar gas pipeline to ensure gas supply for industrial, commercial and domestic use in Jammu and Kashmir. Subsequently, PNGRB transferred the authorization in favour of GSPL India Gasnet Limited, a consortium comprising of GSPL, Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited. The gas pipeline was to be laid through the districts of Kathua, Samba, Jammu, Udhampur, Ramban, Anantnag and Srinagar and the scheduled completion date for the project was 6 July 2014. In order to facilitate acquisition of land for the project, the then J&K Governor had even issued an Ordinance in June 2013.
Though the land acquisition process was started in Kathua and Samba districts, it has not reached the logical conclusion, sources said. “The project has seen no progress despite the fact that the former J&K governor had on 28 November 2018 approved amendments to the J&K Underground Public Utilities (Acquisition of Rights to User in Land) Act, 2014 to increase the time line for completing the gas project,’ an official informed. The SAC had hoped that with the amendment, J&K will have a gas pipeline to Srinagar by the end of 2019 and gas distribution networks shall come up in Jammu, Srinagar and other major towns within 18-24 months thereafter. It is pertinent to mention that J&K High Court has already passed directions seeking the reasons for inordinate delay in completion of the project. On a recent hearing on the matter, the amicus curiae had informed the court at Srinagar that the government of India had already sanctioned Rs 10,000 crore for laying the gas pipeline from Bathinda to Srinagar “but it is only the failure of the government that the funds are not utilized.”
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Policy Matters/ Gas Pricing/Others
In a first, India to launch natural gas trading on electronic platform next month
Indian Gas Exchange (IGX), a wholly-owned subsidiary of Indian Energy Exchange (IEX), hopes to launch natural gas trading on its platform
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beginning next month if the on-ground situation improves. Rajesh Mediratta, Director at IGX said in a virtual event today the company hoped to launch the platform in March itself, however, lockdown measures in-place to deal with the Covid-19 pandemic has led to delay.IGX would be India’s first online gas trading platform for physical delivery of natural gas. Initially, the company has identified Dahej, Hazira and Kakinada as delivery points and will subsequently include Dhabol, Kochi, Ennore and Mundra terminals. According to Mediratta, all trades which will take place on the platform will be for physical delivery and non-transferable.
Trading of natural gas will take place in rupee and the minimum lot size would be 100 Million British Thermal Units (MMBTU). Speaking at the event, D K Sarraf, Chairman of Petroleum and Natural Gas and Regulatory Board (PNGRB), said due to disruptions caused by the ongoing Covid-19 pandemic the regulator is currently not sure if IGX requires any special permission from the government to launch the platform.He added that IGX’s natural gas trading platform will be different from the government’s natural gas trading hub and the regulator is awaiting approval from the government to take further steps to launch its own platform. Speaking about IGX, Sarraf said: “This would facilitate price discovery leading to the natural gas market becoming more transparent. Market would become more efficient and demand and supply would help in shaping the market. This would also increase the confidence of buyers and sellers in the market, many players in our interaction with the industry have raised concerns on the use of natural gas as the market is not that developed or transparent. Market size is also expected to increase due to this.”Mediratta said IGX has already conducted two mock trading sessions in March and April with significant participation from the industry.
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ONGC seeks waivers on cess, royalty
While the slump in international oil prices is good news for fuel consumers, it is spelling economic havoc on the oil and gas producers.
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State-owned ONGC has asked the government to waive the payment of oil cess and royalty as plummeting international oil prices have meant the rate it now gets does not even cover the operating cost, sources said. The ONGC management has told the government its average price realisation of $22 per barrel in April was not enough to cover even the operating cost. On top of it, the drop in natural gas prices to a decade low of $2.39 per million British thermal unit (mBtu) is leading to a loss of about Rs 6,000 crore annually. While the slump in international oil prices is good news for fuel consumers, it is spelling economic havoc on the oil and gas producers. ONGC, sources said, has asked the government to abolish the oil development cess if the price realised by the producers is less than $45 per barrel.
https://www.telegraphindia.com/business/ongc-seeks-waivers-on-cess-royalty/cid/1767332
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Domestic cooking gas demand spikes in April during lockdown
India’s domestic cooking gas demand during the nationwide lockdown has spiked, with state-run Indian Oil Corp. Ltd (IOC) registering a 20% jump
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in liquified petroleum gas (LPG) sales in April. “The corporation’s LPG sale during April 1-20, 2020 was 696.6 thousand metric tonnes (TMT), up by over 19.6% compared to the same period last year,” IOC, India’s largest refiner, said in a statement on Tuesday (April 21). This comes in the backdrop of India rolling out a ₹1.7 trillion relief package, which included providing 83 million below poverty line (BPL) families with free cooking gas cylinders for three months under the Ujjwala scheme. While refiners have slashed production due to reduced demand for transportation fuels, there has been an increase in demand for domestic cooking gas. India is the world’s third-largest oil importer and the fourth-largest buyer of liquefied natural gas (LNG).
“To meet this rise in demand, Indian Oil has tied up additional LPG imports by almost 50%, and its 98 LPG bottling plants are working for extended hours, operating night shifts and on public holidays/Sundays. With its LPG distribution channels, particularly the delivery staff, working round-the-clock, Indian Oil teams have been delivering on an average 26 lakh cylinders every day to the doorsteps of customers in spite of the lockdown,” the IOC statement added. Given the growing LPG demand, India has leveraged its energy security relationship with West Asian nations, with Abu Dhabi National Oil Co. (Adnoc), the state-run oil company of the United Arab Emirates (UAE), helping India meet its cooking gas demand. “Additionally, the corporation has ensured delivery of LPG cylinders to 1.1 Cr. families who are Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries, during this period,” the IOC statement added. IOC processes 80 MMT of crude oil annually and pays around ₹3 trillion to procure the supplies.
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OMCs use crude price drops to make up for fall in demand
Petrol and diesel prices have remained unchanged for over a month at Rs 69.59 per litre and Rs 62.29 per litre, respectively, in the Capital,
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even as Indian crude basket has fallen from around $33.36 per barrel on average in March to $24 per barrel on April 20. Experts say oil marketing companies (OMCs) are making up for inventory losses and reductions in refining margins due to a drop off in demand by as much as 70 per cent due to the lockdown and are unlikely to lower prices in response to the fall in crude prices until demand for fuel recovers.
The price of WTI, the benchmark for prices in North America, fell below zero on Monday closing at -$37.63. India’s basket of crude is not directly affected by the fall as the Indian basket comprises Sour grade (Oman and Dubai average) and Sweet grade (Brent dated) crude oil in a 76:24 ratio.“OMCs are unlikely to cut prices until demand recovers,” said Abhijeet Bora, senior analyst at Sharekhan by BNP Paribas, noting OMCs such as Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation would use lower prices to make up for inventory losses and lower gross refining margins.SunilkumarKatke, head of commodities at Axis Securities, said the retail price of petrol in Delhi would be lower by around Rs 12 per litre at around Rs 57, even after increase in taxes and levies by the government if OMCs had maintained the same level of margins in the price of petrol as they were in January before the beginning of a price war between Russia and OPEC pushed up supply and the lockdowns due to the coronavirus outbreak crashed demand. Katke said despite increased margins, OMCs would not be able to make up for the impact of the fall in demand. “It will compensate for the loss to an extent but not enough given that demand has gone far down. Most of the oil making companies will report poor numbers,” said Katke, adding OMCs will be able to benefit from improved margins only after demand picked up to normal levels.
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Oil PSUs plan to restart projects worth Rs 43,000 crore
State oil companies plan to immediately restart more than 500 projects cumulatively worth about Rs 43,000 crore, government sources said.
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State firms are pushing hard to execute these projects in a situation where deep demand destruction has squeezed cash flow at refiners and increased debt. Low oil prices have sharply cut income at upstream firms and may force them to shelve some projects unviable at current prices. The Ministry of Petroleum and Natural Gas wants to capitalise on the government’s move to partly ease the ongoing nationwide lockdown and allow limited economic activity, the sources said. State oil companies have assessed that 511 projects can be started immediately, a government official said. These projects would require expenditure of Rs 42,790 crore in the current fiscal year, he added. “These projects involving refinery, E&P, marketing infrastructure, pipelines and city gas distribution are expected to generate Rs 2,210 crore pay-out in the first month, out of which Rs 266 crore would be paid to labour,” the official said.
These projects are in line with the home ministry’s guidelines and have been assessed on manpower availability and restrictions by municipalities. Executives at state oil companies, however, said they may face challenges in executing the projects. “Just spending money won’t get the job done. All our projects involve multiple contractors whose financial and execution ability have been hurt by the lockdown. Until they finish a job, we can’t pay them,” said an executive at a state oil firm. The projects include 196 by Indian Oil Corp, 168 of Bharat Petroleum Corp Ltd, 57 of Hindustan Petroleum Corp Ltd, 32 of Gail India Ltd and 26 of Oil and Natural Gas Corp Ltd. Most oil projects are inherently complex and involve global supply chains of expertise and equipment. With lockdowns currently in place across several countries, most local oil and gas projects are likely to be delayed this year.
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LNG Development and Shipping
India’s LNG buyers pessimistic of end may demand pick-up
A tender to buy an LNG spot cargo for delivery to India in the second half of May emerged this week, reflecting expectations that a pick-up in Indian gas and LNG demand may be imminent.
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This is as the Indian government looks to restart and bolster industrial production suspended because of a nationwide lockdown to stop the spread of Covid-19. But many industry participants in India are hesitant to suggest how quickly gas demand can recover in the next few weeks. Indian buyers had been the most active in the spot market in the run-up to the lockdown, issuing tenders for around a total of 21 cargoes for delivery between April and June 2020 in the first quarter of the year. A partial lifting of the lockdown will not help. We are not seeing any improvement in demand yet whether it is for CGD [city gas distribution] or from industries. India imposed a 21-day nationwide lockdown on 25 March, which has been extended to 3 May as the number of coronavirus cases has continued to rise. It relaxed restrictions on 20 April in areas that were not coronavirus hot spots, which was also when state-controlled refiner Bharat Petroleum (BPCL) issued its tender to buy a cargo for delivery to the 17.5mn t/yr Petronet-operated Dahej LNG receiving terminal on 25 May. The tender is valid until today. BPCL expects demand will start showing signs of a pick-up from next month. The firm typically buys LNG for captive consumption at its refineries and to sell to industrial gas users. Its gas demand has fallen by around 30-40pc since the lockdown was imposed. “As of now there is no improvement in gas demand,” an official at the firm said.
“Industrial activity will slowly start again because the government realises we cannot keep things locked up. So, we are trying to get a cargo in end May and by then things should improve.” BPCL has come to the market as spot prices continue to test new lows. Its last spot purchase was on 27 February for a 28 March delivery to Dahej for which it paid around $3-3.10/MMBtu. Market participants suggest that securing a cheap LNG cargo for BPCL’s refinery makes sense, especially as the firm has asked for its term cargoes to be deferred, but do not think the move indicates a re-emergence of demand. The firm, together with other state-owned LNG importers, has asked for deferrals of term cargo deliveries to manage its weak demand and transport and logistical constraints amid the lockdown. It takes 750,000 t/yr from Petronet under its 7.5 MMTPA contract with Qatargas, 100,000 t/yr under a 1MMTPA contract it co-signed with state-controlled gas distributor Gail and refiner IOC for supplies from Qatargas and around 576,000 t/yr from Petronet as part of a 1.44 MMTPA contract with ExxonMobil for supplies from Australia’s 15.6 MMTPA Gorgon LNG. BPCL is not the only Indian buyer to seek cargoes amid the country’s lockdown. Private-sector refiner Reliance Industries (RIL) bought a mid-June cargo at a low-$2/MMBtu on 7 April and an 8-11 May delivery on 16 April. RIL and BPCL both use LNG as feedstock gas in their refinery operations, but RIL’s output is mostly for export. Other LNG importers do not see their LNG demand returning quite so soon despite a relaxation in containment measures.
Source: Argus Media/Indian Oil & Gas
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Natural Gas / Transnational Pipelines/ Others
Withdrawals from natural gas storage this winter were lowest since 2015–16 – USA
Working natural gas in storage in the Lower 48 states as of March 31, 2020, totaled 2,008 billion cubic feet (Bcf), 19% more than the previous five-year (2015–19)
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average for the end of the heating season, according to EIA’s Weekly Natural Gas Storage Report. The 2019–20 heating season, which ran from November 1, 2019, to March 31, 2020, ended with the most working natural gas in storage since the 2016–17 winter, with 1,718 Bcf in net withdrawals, the least in four winters. Continued growth in natural gas production and relatively mild winter temperatures accounted for relatively higher inventory levels. Working U.S. natural gas stocks entered the heating season at 3,575 Bcf, nearly the same as the average over the previous five years. The 2019–20 U.S. heating season was characterized by periods of significantly warmer-than-normal temperatures. Heating degree days (HDD), a temperature-based indicator of heating demand, were 10% less this winter than the 30-year normal (1981–2010) and were higher than normal for only one week in November during this heating season.EIA expects total working gas inventory to remain higher than the previous five-year average through the 2020 refill season (April 1–October 31). EIA’s Short-Term Energy Outlook (STEO) forecasts natural gas production to decline from year-ago levels this summer.
These production declines, combined with growth in natural gas exports, will lead to smaller net injections into working gas storage through the refill season.EIA expects that inventories will total 3,904 Bcf by the end of the 2020 refill season, or 185 Bcf more than the previous five-year average and 252 Bcf more than last year. EIA’s April 2020 STEO forecast is subject to heightened uncertainty because of economic slowdown and significant recent changes in energy markets.
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UK becomes world’s cheapest natural gas market
Britain has become the world’s cheapest natural gas market as the front-month contract fell below its U.S. counterpart this week in a rare event caused by
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falling energy demand owing to the coronavirus outbreak. The last time this happened was a decade ago in the aftermath of the global financial crisis of 2007/08.The U.S. Henry Hub gas price is usually considered the floor for European gas prices. The drop in UK gas below the U.S. price has made it not only the cheapest in Europe but globally. The May contract on the UK’s National Balancing Point (NBP) hub closed on Monday at $1.72 per MMBtu, $0.20 below U.S. Henry Hub May futures , Refinitiv price data showed. On Tuesday (April 21), the UK contract shed more value, trading around $1.63 per MMBtu in the afternoon. “Today there was another realisation that demand has been affected globally and there is concern about a second wave of COVID-19 and social distancing measures could last for at least 12 months,” said Wayne Bryan, director of European gas research at Refinitiv. In continental Europe, prices are at premium to the NBP. On the Dutch market, the most liquid in Europe, the May contract closed slightly above $2 per MMBtu on Monday and fell to about $1.90 per MMBtu on Tuesday, Refinitiv data showed. In Asia, liquefied natural gas (LNG) prices are slightly above $2 per MMBtu.”UK natural gas demand in April has been very low due to lockdowns,” said Carlos Torres-Diaz, head of gas and power markets at consultancy Rystad Energy. “So far, demand from the power sector has dropped 34 per cent from March to April and 8 per cent in the industrial sector. The drop in total demand has now been exacerbated as the weather has turned warmer and windier resulting in even less gas demand for power and in the residential sector. “In the United States, industrial demand remained strong despite the coronavirus crisis and the market remained balanced, with strong injections into storage, Torres-Diaz added. Another reason for the weak UK prices is the continued arrival of liquefied natural gas (LNG) cargoes to Britain.
“LNG will be strong again (in May) with no possibility to cancel cargoes as it’s too late to meet deadlines,” one gas trader said. Qatari arrivals have been strong, with cargoes that cannot find a home in Asia being delivered to Europe, mostly to Britain, gas traders said.A total of 12 cargoes from Qatar are expected to be discharged in Britain by the end of the month, two more than in April 2019, Refinitiv data showed. Four cargoes from the United States arrived in Britain this month, compared with one in April 2019, but there have been no cargoes since April 9.”If you look at the absolute price and the production costs, then it is clear that less (U.S.) LNG will come,” a gas trader said.
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OPEC cuts oil demand view again as market faces ‘historic shock’
OPEC on Thursday (Apr16) again cut its forecast for 2020 global oil demand due to the “historic shock” delivered by the coronavirus outbreak,
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and said the reduction may not be the last. The Organization of the Petroleum Exporting Countries now expects global demand to contract by 6.9 million barrels per day, or 6.9 per cent, in 2020, it said in a monthly report. Last month, OPEC expected a small increase in demand of 60,000 bpd. “The oil market is currently undergoing historic shock that is abrupt, extreme and at global scale,” OPEC said in the report.” Downward risks remain significant, suggesting the possibility of further adjustments, especially in the second quarter,” OPEC said of the demand forecast. Oil has collapsed in 2020 due to the slide in demand, falling to an 18-year low of $21.65 a barrel on March 30. To try to shore up the market, OPEC, Russia and other producing nations have agreed to a record supply-cut pact. OPEC expects the drop in demand this month to be the largest, seeing a contraction of 20 million bpd. Crude was trading just above $28 a barrel after the release of the OPEC report, paring an earlier gain. Even so, OPEC expects a smaller near-term impact on demand than the International Energy Agency, which on Wednesday forecast a 29 million bpd dive in April oil demand to levels not seen in 25 years.
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US natural gas futures fall as LNG exports decline
US natural gas futures fell for a fifth consecutive day on Wednesday (Apr 15), as pipeline and liquefied natural gas (LNG) exports declined
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and concerns rose over how measures to slow the spread of coronavirus will continue cutting demand. “Lost demand due to coronavirus-related closures and recent maintenance on pipelines that supply LNG terminals and exports to Mexico continue to leave excess gas in the market,” said Daniel Myers, market analyst at Gelber & Associates in Houston. In addition, some traders noted gas was down with oil futures. US crude settled at its lowest since Feb. 2002 on Wednesday (Apr 15). Front-month gas futures for May delivery on the New York Mercantile Exchange fell 5.2 cents, or 3.2%, to settle at $1.598 per MMBtu. That marked the contract’s lowest close since April 2 when it settled at $1.552 per MMBtu, its lowest since August 1995. It also put the front-month down for a fifth straight day for the first time since October, when the contract was about 14% higher. Even before the coronavirus started to cut global economic growth and energy demand, gas was trading near its lowest in years as record production and months of mild winter weather allowed utilities to leave more fuel in storage, making shortages and price spikes unlikely. Looking ahead, however, gas futures for the balance of 2020 and calendar 2021 were trading much higher than the front-month on expectations demand will jump in coming months, as the economy snaps back once governments loosen travel and work restrictions after slowing the spread of coronavirus. The premium of futures for June over May rose to its highest since 2008 when the contracts started trading for a fourth day in a row, while calendar 2021 has traded over 2022 for 25 days and over 2025 for 15 days.
https://www.brecorder.com/2020/04/17/590118/us-natural-gas-futures-fall-as-lng-exports-decline/
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3 reasons why oil prices can hit $5.00
Crude Oil futures just broke below their March 2020 lows and are plunging even after President Trump brokered a deal for OPEC to cut production.
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There’s a growing consensus that oil prices will be trading in the low single digits and some traders believe that “the new normal” for oil will be near $5/barrel. Here are three reasons why:
Economics 101: Supply & Demand
Economics 101 tells us that price is a function of supply and demand. Right now, supply is surging across the globe and demand is plunging. Eventually that will change and demand will increase but even when it does many people believe that it will not come close to absorbing the global supply glut.
Demand Is Evolving: The Green Movement
The world is changing and human behavior continues to evolve in ways that are hard to predict even when you were a kid. When you were 10 would you ever believe that we would be driving around in electric cars? That was something that even Hollywood didn’t imagine. Back To The Future Part 2 imagined a world with flying cars that were powered by our compost. In recent years, thanks to technology, one of the new trends that has slowly emerged, but continues to grow, is the green movement. People want to go “green” and that means lower demand for oil. Tesla TSLA introduced an affordable electric car and sales have surged. The company also released other electric vehicles (cars, crossovers, trucks, and SUVs) and demand is off the charts. Just about every other major automobile company is working hard to develop their own line of electric/green vehicles. It is just a matter of time until the technology improves and other means of transportation go “green” as well. All that translates into a big drop in demand for energy. Maybe fully electric planes are not going to begin flying tomorrow but the demand for green everything is a formidable force (and growing).
Natural Gas:
Any “old-timer” in the energy market remembers when Natural Gas was trading at much higher levels. But that world has changed. Back in 2005, Natty was trading in the mid teens but since then it has plunged to low single digits and has stayed there since 2008. Why? Because post 2008, supply has greatly exceeded demand.
Bottom Line:
Anything can happen with oil prices. Supply shocks happen…Demand can spike back up. But all we know right now is that oil is in a bear market and the path of least resistance is lower… for now. Trade accordingly.
https://www.hellenicshippingnews.com/3-reasons-why-oil-prices-can-hit-5-00/
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Eni reports sharp declines in 1Q natural gas, LNG sales from coronavirus
Italian supermajor Eni SpA reported a steep drop in natural gas sales during the first quarter as the Covid-19 outbreak began destroying demand in Asia and Europe.
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The international oil and gas producer also has stakes across the liquefied natural gas (LNG) value chain, from liquefaction and shipping to regasification and trading. Eni said 1Q2020 gas sales declined by 21% year/year (y/y) to 16.75 BCM. LNG sales also slid by 7% year/year to 2.50 BCM. “The period since March has been the most complex period the global economy has seen for more than 70 years,” said CEO Claudio Descalzi. “For the energy industry, and in particular for oil and gas, the complexity is even greater given the overlap of the effects of the pandemic with the collapse in oil prices.” The oil rout has prompted a global response from producers who have announced spending and production cuts as the virus has crushed demand. Global gas prices have also converged to unprecedented lows and squeezed the margins of sellers as demand has been impacted by lockdown measures aimed at fighting the pandemic across the world. Eni said it would cut its capital spending this year by 30% and possibly more next year. First quarter oil and gas production was also down 3.6% year/year to 1.77 million boe/d, and the company has lowered its guidance for the year to 1.75-1.80 million boe/d due to spending cuts and impacts of the coronavirus on demand. Eni said it is assuming a gradual recovery in global consumption of oil, natural gas and power in the second half of this year. Natural gas sales in Italy, among the nations hardest hit by the virus, declined 17% y/y to about 9 Bcm in the first quarter, “mainly due to weaker seasonal sales and the impact of an ongoing economic downturn following the containment measures in Italy and Europe as a result of the spread of Covid-19,” Eni said. Sales across European markets, where restrictions in some countries are only now beginning to ease, also declined 16% year/year to about 6 BCM, primarily as a result of lower volumes marketed in Germany and Turkey. Warmer winter weather was already pushing worldwide gas prices lower and supplies up when the coronavirus took hold and devastated fundamentals even more. But LNG arrivals into Europe in particular stayed strong throughout the first quarter, holding near record levels that were set late last year. Even still, Eni said its LNG business took a hit during the fourth quarter and was “negatively affected by a downturn in Asian economies,” where the virus first took hold earlier in the year, “with fallout on LNG demand and prices.”
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US natural gas futures rise on slowing output
US natural gas futures rose on Tuesday (April28) with a continued slowdown in output as drillers shut oil wells in shale basins due to the collapse in crude prices.
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Those oil wells also produce a lot of gas. Traders noted gas prices rose despite long-term forecasts that government lockdowns to stop the coronavirus spread would reduce domestic demand for gas and cut US LNG and pipeline exports. On its last day as the front-month, gas futures for May delivery on the New York Mercantile Exchange rose 3.6 cents, or 2.0%, to $1.855 per MMBtu at 10:00 a.m. EDT (1400 GMT). The June contract, which will soon be the front-month, was up about 7 cents to $1.98 per MMBtu. Looking ahead, gas futures for the balance of 2020 and calendar 2021 were trading even higher than the front-month on expectations demand will jump as the economy snaps back once governments loosen travel and work restrictions. US crude, meanwhile, remained on track to drop for a fourth week in a row, falling about 60% during that time. The US Energy Information Administration (EIA) projected gas production will fall to an annual average of 91.7 billion cubic feet per day (bcfd) in 2020 and 87.5 bcfd in 2021 from a record 92.2 bcfd in 2019 as drillers shut wells and cut spending on new drilling. That would be the first annual production decline since 2016 and the first time output fell for two consecutive years since 2005. Data provider Refinitiv said gas output in the US Lower 48 states averaged just 92.7 bcfd so far in April, down from an all-time monthly high of 95.3 bcfd in November. EIA projected coronavirus lockdowns will cut US gas use – not including exports – to an average of 83.8 bcfd in 2020 and 81.2 bcfd in 2021 from a record 85.0 bcfd in 2019. That would be the first annual decline in consumption since 2017 and the first time demand falls for two consecutive years since 2006. With milder, spring-like weather coming, Refinitiv projected demand in the Lower 48 states, including exports, would slide from an average of 86.7 bcfd this week to 85.1 bcfd next week.
https://www.brecorder.com/2020/04/30/593358/us-natural-gas-futures-rise-on-slowing-output/
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Global LNG Development
Up to 25 US LNG cargoes may be cancelled
As many as 25 LNG cargoes originally scheduled for June loading from US liquefaction facilities have likely been cancelled as
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European and northeast Asian spot prices have dropped to all-time lows. Delivered markets at a tight premium or even at a discount to the Henry Hub have incentivised firms with US offtake to turn down some cargoes, potentially tightening supplies in Europe and supporting prices for deliveries to the region and northeast Asia. Around 10 Asian and European firms may have cancelled loadings for around 16 cargoes from Cheniere Energy’s 25 MMTPA Sabine Pass LNG terminal in Louisiana and 10 MMTPA Corpus Christi LNG terminal in Texas, according to industry participants. Another four firms have likely turned down a total of five cargoes from the 10 MMTPA Freeport LNG export plant, also in Texas, they said. Fob customers had until 20 April to notify Cheniere Energy if they would not be lifting their contractual volumes from Sabine Pass or Corpus Christi in June. The 14 firms — four of which are from Asia, including Indonesia, Japan and Singapore — have confirmed their cancellations with Cheniere. Contracts with Cheniere generally give buyers the option to not lift cargoes, but they are required to notify the exporter 45-60 days in advance of the delivery date and pay liquefaction fees. Cheniere’s term offtakers typically pay around 115% of the final Nymex Henry Hub settlement for the month in which a cargo is loaded for feedgas, on top of $2.25-3.50/MMBtu in liquefaction fees.
Most of the contracts are signed on a “take-or-pay” basis, meaning that buyers will still have to pay liquefaction costs even if they cancel purchases. A narrowing of the price spread between European gas hubs and northeast Asia spot LNG in recent weeks amid a slump in prices has effectively rendered the inter-basin arbitrage closed. This means the delivery of Atlantic cargoes to Europe would be comparatively more economical than to northeast Asia. US cargo cancellations reduce potential supply pressure on Europe, which is the market to which sellers and traders would likely have sent the cargoes had they not been cancelled. The reduced availability of cargoes could lend some support to European gas prices, with a knock-on effect on northeast Asian spot prices. Market participants have typically referenced European gas hub prices as the floor for spot prices in northeast Asia, although the inter-basin differential has narrowed in recent weeks.
European gas hub prices have come under pressure in the past month and fallen to record lows, weighed down by weak industrial and power sector demand because of the Covid-19 outbreak. The June contracts of the UK NBP and Dutch TTF stood at $1.758/MMBtu and $1.994/MMBtu, respectively, yesterday, putting their discount to the ANEA price, the Argus assessment for spot deliveries to northeast Asia, for July at just 19.6-43.2¢/MMBtu, which would not be sufficient to cover the differential in shipping costs between the two delivery markets. A differential of around $0.90-1/MMBtu is required, market participants said. The arbitrage was likely last open in mid-March, which led to at least one spot cargo delivery from the US to China in April, following China’s waiver of duties on US LNG. China is expected to receive around five LNG cargoes from the US this month. The NBP and TTF April contracts stood at a discount of 93¢/MMBtu and 89¢/MMBtu, respectively, to the ANEA price on 17 March, which was sufficient to incentivise the flow of US cargoes to northeast Asia. Prices for LNG deliveries to Asia have collapsed and tested new lows every day since last week. The Covid-19 outbreak has exacerbated and added further pressure to the global supply glut, with buyers from Japan, India and South Korea requesting to defer their term deliveries amid weak downstream demand. The ANEA price stood at what is now an all-time low at $1.810/MMBtu and $1.925/MMBtu for the first and second half of June, respectively, yesterday, having lost 27.5-28.5¢/MMBtu, or 10-15pc, since the start of the previous week. First-half June debuted on 16 March at $3.505/MMBtu, while second-half June debuted on 1 April at $2.345/MMBtu.
Source: LNG Global
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LNG prices sink again as coronavirus disrupts demand
Asian spot prices for liquefied natural gas (LNG) sank this week as the coronavirus pandemic further dampened demand, prompting buyers to push back cargo deliveries.
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The average LNG price for June delivery into northeast Asia LNG-AS was estimated at around $2.30 per MMBtu on Friday (April 17), $0.20 per MMBtu lower than the estimate last week. The current price is almost half that for June a year ago, Reuters data showed.
LNG and gas stocks had already been high all over the world, a trader said. “Coronavirus has made the bad much worse. The market is down due to low offtake by usual buyers,” he added. Several buyers around the world are trying to defer cargo deliveries, industry sources said, which has led to several floating cargoes and prompted some sellers to offer unwanted volumes in tenders. “That’s why there are so many sell tenders on the market,” the LNG trader said. In a tender this week, Australia’s Ichthys LNG plant sold a cargo for loading in early May below $2/MMBtu on a free-on-board (FOB) basis, sources said. Brunei’s LNG export plant sold an early June cargo at $2.30/MMBtu on a FOB basis and also separately sold a cargo on a delivered ex-ship (DES) basis for May 8-9 at around $2.10 per MMBtu. There was an offer from Indonesia’s Tangguh LNG plant this week for five cargoes for the May to July period. Indonesian exporter Pertamina also offered two June cargoes.
In an unusual move, Royal Dutch Shell RDSa.L issued a five-year strip tender offering four cargoes a year from 2021 onwards with an option to extend for another five years. On the S&P Global Platts Market on Close window on Friday, commodity trader Gunvor bought an early-June cargo from Vitol at $2.05/mmBtu, but other bids and offers in the window were higher. There were also some buyers on the market looking to purchase volumes as the LNG prices are at historical lows. Turkish state energy company Botas was seeking seven cargoes for delivery over May to June. Kuwait Petroleum Corp (KPC) was looking to buy a cargo for delivery in May. German energy company EnBW EBKG.DE was seeking four cargoes for delivery in northwest Europe in the third quarter of this year. In China, Shenzhen Energy issued a tender for a June cargo. A trader said there were signs of “going back to normal” in China, adding that some demand might return in India after the lockdown in the country was eased in some areas next week. But he added that, so far, some Indian’s buyers were still trying to defer cargoes. Japanese buyers might also try to defer cargoes, three sources said, but this could not be immediately confirmed.
Source: LNG Global
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LNG Ltd looks for new partners after takeover bid withdrawn
Liquefied Natural Gas Ltd said on Tuesday (Apr 14) it is negotiating with other parties and has enough money to keep operating until May after Singapore-based LNG9 withdrew
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its takeover bid because the financing fell through:
* LNG Ltd is one of several companies developing North American LNG export plants that have delayed projects as global gas prices dropped to their lowest in years in an oversupplied market in 2019, and plunged to record lows in 2020 as the coronavirus outbreak caused demand to collapse.
* Shares of LNG Ltd tumbled as much as 56.5% to a record low A$0.050.
* LNG Ltd said it still remains engaged with LNG9 even as its is negotiating with other parties.
* In early 2019, LNG Ltd said it planned to make a final investment decision (FID) to build its proposed $4.4 billion, 1.2-billion cubic feet per day (bcfd) Magnolia export plant in Louisiana.
* One billion cubic feet is enough gas for about 5 million U.S. homes for a day.
* By late 2019, however, LNG Ltd, like many other developers, pushed its FID plans back to 2020.
* Now that coronavirus-related demand destruction has caused most LNG developers to delay projects, LNG Ltd is no longer saying when it may make a FID on Magnolia as it seeks partners so it can continue developing its projects.
* LNG Ltd is also developing the Bear Head export plant in the Canadian province of Nova Scotia.
* In mid-2019, a dozen North American developers, including LNG Ltd, said they planned to make FIDs to build new projects by the end of the year. None of those projects are under construction. All of those FIDs were delayed until 2020 or later.
* At the start of 2020, another dozen developers – some from 2019 – said they planned to make FIDs by the end of this year. Currently, however, that total is down to around half a dozen, and analysts said they expect just one or two of those projects to go forward this year.
* In total, energy firms are developing over 50 bcfd of new export capacity in North America. If built, those plants would consume more than half the gas produced in the United States.
* In reality, analysts expect U.S. LNG capacity will only rise to around 15 bcfd by 2025, up from 8 bcfd operating now and another 6 bcfd already under construction.
Source: LNG Global
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China’s GCL, Shell sign preliminary deal on LNG trading joint venture
The proposed JV would secure LNG supplies from Shell and market the fuel to a receiving terminal which GCL is planning in Jiangsu province,
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GCL said in a statement. GCL Oil & Natural Gas Co Ltd has signed a framework agreement with Royal Dutch Shell to explore setting up a joint venture based in eastern China to market and trade liquefied natural gas (LNG), the privately owned Chinese company said on Tuesday (April13). The proposed JV would secure LNG supplies from Shell and market the fuel to a receiving terminal which GCL is planning in Jiangsu province, GCL said in a statement. A Shell spokeswoman confirmed the agreement. The companies provided no further details. GCL, a subsidiary of private energy and power firm GCL (Group) Holding, is one of over a dozen Chinese gas terminal developers outside state giants China National Offshore Oil Company, PetroChina and Sinopec Corp that have so far dominated the LNG sector. China is the world’s No.2 LNG importer. GCL is planning three receiving terminals along China’s east coast – Yantai in Shandong province, Rudong in Jiangsu and Maoming in Guangdong – with a total annual handling capacity of 14.5 MMT, Huang Shaohua, a strategic planning official with the firm, told Reuters. Among them, the 5 MMTPA Yantai project was first to have won state regulatory approval, in January, and GCL aims to start constructing the facility this year, Huang added. The Yantai terminal, at an estimated cost of $1.1 billion, would start up in 2023, Reuters reported in March. GCL submitted an investment plan for the 6.5 MMTPA Rudong terminal to the state authority last December, Huang added. The firm is in discussions with state oil and gas major PetroChina for possible joint investment in the third terminal, the 3 MMTPA facility in Maoming, he said.
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Buyers in Asia and Europe cancel around 20 U.S. LNG cargoes for June loading – trade sources
Buyers in Asia and Europe have cancelled the loading of around 20 cargoes of liquefied natural gas (LNG) in the United States in June,
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EXTRA
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four trade sources said on Wednesday (April 22). The majority of the cargoes were cancelled from Cheniere Energy’s plants, Sabine Pass in Louisiana and Corpus Christi in Texas for June loading, the sources said. Several cargoes were also cancelled from the Freeport plant in Texas. It could not be immediately confirmed if Freeport cancellations are for June or May loading. The cancellations came as the coronavirus pandemic dampened gas demand around the world, with gas and LNG prices tumbling to record lows.
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Update-Price agency Platts says JKM LNG price falls to record low
The Japan-Korea-Marker (JKM) price for liquefied natural gas (LNG) assessed by S&P Global Platts fell to a record low of $1.938 per MMBtu on
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Thursday (April 23), Platts told Reuters. The drop means that the JKM price is now almost at parity with the Henry Hub gas price in the United States, discouraging spot cargo deliveries from the United States to Asia as the coronavirus pandemic dampens global gas demand in an already heavily oversupplied market. “The major driver for the price drop in the last week has been a wave of supply tenders for May and June delivery. This has further flooded an already-underwater spot market,” said Ciaran Roe, head of LNG pricing at S&P Global Platts, adding that JKM hit a new low every day this week. Earlier this week, British front-month gas contract fell below the Henry Hub front-month futures for the first time in a decade, with the price of LNG delivery to Europe also below the U.S. gas price. Buyers in Asia and Europe cancelled loading of around 20 LNG cargoes in June, trade sources said this week. “While some supply may be taken out of the market via US cargo cancellations for June loading, that would only help balance the North Asia market for July deliveries,” Roe said. The JKM price is increasingly becoming the benchmark for Asian spot cargoes. The price was assessed for June delivery on Thursday.
Source: LNG Global/Reuters
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Jihadist massacre is latest threat to £44bn Mozambique gas project
Islamist militants massacred 52 villagers who refused to join their ranks in an escalation of terrorism that is threatening Africa’s largest gas project.
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The victims were beheaded or shot in northern Mozambique, home to a £44 billion liquefied natural gas (LNG) programme that emboldened jihadists are targeting for an Islamist caliphate. In recent weeks the insurgents have scored their biggest triumphs in a 30-month onslaught in the southern African state. A helicopter belonging to a South African private military company, which replaced defeated fighters from Russia, was shot down by the militants. Islamic State, which put out a video claiming responsibility, is feared to have ambitions to establish “franchise” operations in Africa’s conflict zones. Orlando Mudumane, a police spokesman, told the state-owned broadcasting service:
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Deal to restart Egypt’s Damietta LNG plant falls through
A deal designed to allow the restart of Egypt’s idled Damietta LNG export facility, operated by a partnership between Italy’s Eni and Spain’s Naturgy,
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has fallen through. The collapse of the deal, reached in February between the companies, the Egyptian government and state-owned EGAS, means a targeted restart of the 5 MMTPA plant by June looks unlikely. The restart of Damietta, which has been idled since 2012, would have provided a much-needed additional export option for Egypt, which currently has a surplus of gas. However, with spot LNG prices currently at record lows, the plant may have struggled to be economic. “The February agreement was subject to certain conditions and milestones that have not been met, so the agreement has fallen through,” Naturgy said in a regulatory filing Damietta LNG is operated by Union Fenosa Gas, a 50-50 joint venture between Eni and Naturgy. Under the agreement in February, UFG was to be restructured, with the assets to be divided between Eni and Naturgy. Naturgy was to receive $600 million in cash and most of UFG’s assets outside Egypt, excluding UFG’s commercial activities in Spain, which Eni was to take. Egypt currently only exports from the 7.2 million mt/year Idku facility operated by Shell, and weak prices have led to a collapse in shipments even from there, with a halving of cargoes shipped in the first quarter compared with a year earlier. Damietta LNG was idled in 2012 after feedgas to the plant was diverted for use on the domestic market. Efforts to restart it were complicated by a lawsuit filed by UFG against Egypt in 2014. UFG was awarded $2 billion by the World Bank’s International Centre for Settlement of Investment Disputes, and Naturgy said Thursday (April 24) it would continue to pursue the claim.
The February agreements would have provided for the resolution of all outstanding disputes. Naturgy said it still hoped to reach a new deal. “Naturgy reiterates its openness to reach agreements with all the parties that would amicably and definitively resolve the disputes that affect UFG,” it said. Eni also said it would seek a new agreement. “In February we reached an agreement with Naturgy and EGAS for the restart of Damietta liquefaction plant, the settlement of outstanding disputes and some M&A transactions,” an Eni spokesman said. “Eni is in touch with the counterparties and willing to set the frame of a possible new agreement.” Under the agreement to split UFG, the company was valued at $1.5 billion, of which $1.2 billion related to its Egyptian assets. UFG’s 80% share in Damietta was to be divided between Eni (50%) and EGAS (30%), meaning Damietta’s shareholders would have been Eni (50%), EGAS (40%) and state-owned oil company EGPC (10%). Eni was also to take over the contract for the purchase of gas for the plant and would have received corresponding liquefaction rights.
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Poland’s PGNiG receives LNG delivery from U.S.
Poland’s dominant gas firm PGNiG received a third delivery of liquefied natural gas (LNG) from U.S. company Cheniere on Tuesday under a long-term
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contract as Warsaw plans to reduce reliance on Russian supplies. Poland still imports most of the gas it consumes from Russia, but has taken steps to reduce that dependence so it does not have to extend the long-term deal with Gazprom on gas supplies beyond 2022 when it is scheduled to expire. The country has significantly increased LNG purchases via its terminal in Swinoujscie on the Baltic Sea following PGNiG deals with Qatar and the United States. On Tuesday LNG carrier “GasLog Warsaw” arrived at the Swinoujscie terminal from Sabine Pass, Louisiana with a cargo of 70,000 tonnes of LNG or 95 million cubic metres after regasification. This was the third delivery under the contract signed with Cheniere in 2018 and second this year, PGNiG said. “Despite the global turbulences related to the coronavirus pandemic, LNG supplies flow to Poland without any interruptions and as planned,” PGNiG Chief Executive Jerzy Kwiecinski said in a statement. PGNiG signed a long-term deal with Cheniere Marketing International in 2018 under which PGNiG was to receive a total of 0.52 million tonnes of LNG in the period 2019-22 and 29 million tonnes from 2023-42. After regasification, this corresponds to 0.7 bcm of gas by 2022 and 39 bcm in 2023-2042. Starting from 2023, PGNiG will receive 1.45 mlntonnes of LNG, or 1.95 bcm of gas, each year. Poland received its first LNG cargo from the United States in 2017, a spot delivery from Cheniere Energy.
https://www.hellenicshippingnews.com/polands-pgnig-receives-lng-delivery-from-u-s/
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Qatar maintains position as world’s largest LNG exporter in 2019: IGU
Qatar managed to maintain its position as the largest liquefied natural gas exporter in the world (at 77.8 MMT) in 2019, International Gas Union (IGU)
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said in its “2020 World LNG Report”. Global LNG trade increased further in 2019, reaching 354.73 MMT, an increase of 40.93 MMT since the end of 2018. This constitutes an increase of 13%, a sixth year of consecutive growth, it said. Most of the additional exported volumes in 2019 were from existing exporting markets: US (+13.1 MMT), Australia (+8.7 MMT) and Russia (+11 MMT). “The Qatar LNG expansion plan is progressing towards final investment decision (FID) and those capacity additions could re-position Qatar as the market with the largest liquefaction capacity globally,” the IGU noted. According to the IGU, top LNG exporter Qatar is followed by Australia at (75.4 MMT). The US (33.8 MMT) overtook Malaysia (26.2 MMT) as the third largest exporter, and added record export volumes. Russia is now the fourth largest exporter of LNG (29.3 MMT). Asia Pacific continued its growth trajectory as the largest export region (131.7 MMT), the IGU said.
Only three markets saw a drop in export levels versus 2018: Indonesia saw the largest drop in export (-2.7 MMT), followed by Equatorial Guinea (-0.65MMT) and Norway (-0.45MMT). “No new importers were added to the list in 2019. However, most recent new importers increased imports further in 2019, such as Bangladesh, Pakistan, Poland and Panama,” the IGU said. The largest increases in imports were seen in Europe, with the UK, France, Spain, the Netherlands, Italy and Belgium accounting for most of the additional imports (+32 MMT). Asian and Asian Pacific markets that contributed to global trade were China, India and Malaysia. The largest importing regions, consistent with 2018, were Asia-Pacific (131.7 MMT) and Asia (114.5 MMT). Currently, 907.4 MMTPA of liquefaction capacity is in pre-FID stage, with the majority of the proposed capacity coming from the US and Canada. Africa has 93.3 MMTPA of liquefaction capacity proposed and could emerge as a key LNG production region if those projects materialise. The record volume of sanctioned liquefaction projects is underpinned by the expectation of growing LNG demand globally, creating the need for additional liquefaction capacity. This will also lead to competition to secure engineering, procurement, construction (EPC) capacity, as project developers aim to enter the market by the mid-2020s in order to capture growing demand, the IGU noted. Joe M Kang, president, International Gas Union said, “Gas continues to play a vital role towards an economically and environmentally sustainable energy future. LNG in 2019 continued to play a key role in improving air quality in markets such as China. “It produces less than 10% of the particulates and 50% less greenhouse gas (GHG) than coal when used in power, 21% less than fuel oil in transport and above 95% efficiency when used to heat homes. The industry continues to improve measurement and reduction of emissions across the full LNG value chain. Kang noted, “Almost a billion people today have no access to electricity and nearly 3bn have to cook with fuels that produce toxic fumes in their homes. Indoor air quality still represents a large part of the premature deaths attributable to air pollution (3.8mn deaths in 2016) – proof of the urgent need to tackle this issue. “As the cleanest burning fossil fuel, natural gas has a key role in providing reliable and cleaner energy to all. Even in the most developed markets, affordability and reliability of clean energy is a key issue and switching to natural gas offers an enormous opportunity. The IGU will continue to demonstrate the vital environmental and economic role of gas in the sustainable energy future and encourage collaboration between industry and communities towards achieving this future.”
https://www.gulf-times.com/story/661803/Qatar-maintains-position-as-world-s-largest-LNG-ex
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Natural Gas / LNG Utilization
U.S. logistics company chooses CNG trucks to cut greenhouse gases
Odyssey Logistics & Technology Corporation has ordered two CNG tractors for its subsidiary, Linden Bulk Transportation LLC. The new vehicles,
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which will strengthen the company’s commitment to reducing greenhouse gas (GHG) emissions, are expected to be delivered in mid-2020 and are the first in Linden’s plan to add more natural gas trucks to the Odyssey fleet. “Natural gas powers more than 12 million vehicles on the road today – and for good reason,” said Bob Shellman, president and CEO, Odyssey. “Companies like Odyssey use CNG tractors to reduce smog-forming emissions and pollutants and better align with carbon footprint and sustainability goals. We’re really proud of the investments we’re making across the company to enhance our sustainability efforts.” Currently, the sustainable fleet includes 21 LNG and eight CNG tractors operated by Odyssey subsidiary, RPM Consolidated Services, Inc. “We have customers who specifically request natural gas transportation as part of their corporate sustainability objectives,” said Shawn Duke, president of RPM. Odyssey integrates green initiatives across its organization. “Sustainability in this industry is a leading focal point for us and we’re making strides toward a more innovative future through the CNG fleet,” said Michael Salz, president, Linden. “The fleet shows our customers how important it is that we meet them on values and battle industry challenges, like climate change, head-on through green initiatives like this.”
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Record demand for natural gas for vehicles in the United Kingdom
Gasrec has recorded a five-fold increase in sales of natural gas across its commercial vehicle refueling network in the first quarter of 2020,
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versus the same period in 2019. This record growth follows an influx of new trucks into the market running on CNG or LNG – with demand in March 2020 exceeding the previous peak of September 2014, at the height of the Euro-5 dual fuel era. “The growth we have seen has been phenomenal, with volumes more than doubling between the final quarter of 2019 and the first quarter of 2020,” said James Westcott, Chief Commercial Officer at Gasrec. “Registrations of gas-powered 44-toners has played a big role, together with the general realization from the industry that gas represents the best opportunity right now to significantly reduce emissions and running costs.” Gasrec now expects its CNG and LNG volumes to flatten temporarily as European truck production is largely halted due to COVID-19, limiting the opportunity for new natural gas vehicles to enter the market. “We work closely with customers to ensure we have the refueling infrastructure they need in place before new trucks arrive, so we know the forward order bank is strong. Once production resumes, we fully expect the steep growth trajectory we’re on to return – it’s just been shunted back from one quarter to another,” added Westcott. Gasrec counts three supermarket chains amongst its major customers – recording heavy fleet utilization during March in the battle to keep shelves and RDCs stocked. “One supermarket we supply doubled its demand for gas inside a week,” reports Westcott. Demand for gas year-to-date is currently split approximately 70/30 in terms of LNG versus CNG, with LNG proving most popular for vehicles requiring maximum range. Gasrec supplies fleets from a network of eight refueling facilities, with its flagship 24/7 site at the Daventry International Rail Freight Terminal (DIRFT), currently running at just over 30% capacity. At maximum utilization, DIRFT has the capacity to refuel 700 heavy goods vehicles per day.
https://www.ngvjournal.com/s1-news/c4-stations/record-demand-for-natural-gas-for-vehicles-in-the-uk/
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LNG station for heavy trucks now operational in central Germany
Liqvis, an LNG transport infrastructure development company and a wholly owned subsidiary of Uniper, has opened a news LNG filling station
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for trucks in the central German city of Kassel. This is now Liqvis’s second permanent LNG station—with the first located in Grünheide near Berlin—and it will replace the mobile station that has been placed in Kassel up until now. Liqvis is planning to relocate this mobile unit from Kassel to Hamm in North Rhine-Westphalia in order to meet rising demand and to expand the network of LNG refueling stations in the short term. The new station will make refueling faster and more convenient for customers: two trucks can now be refueled at the same time, and in the future this could even be increased to four. The facility on the A7 freeway between the Kassel-Mitte interchange and the Kassel-Süd triangle was built in just about four months and is now open 24/7. Its prime location in the center of Germany makes the site a hotspot for long-haul heavy trucks, as previously demonstrated by the high demand for the mobile station. In addition to the two permanent LNG stations already open in Kassel and Grünheide, Liqvis is planning further projects in the coming months: an LNG station in Calais, northern France, is already under construction, and further stations in Rosengarten near Hamburg and Langenhagen near Hanover are currently in the process of being approved. Concrete plans are also in place for stations near Bönen, near Ulm, near Magdeburg and near Bad Honnef. “Thanks in no small part to the toll exemption in Germany, LNG has established itself as a fuel on the market over the last three years, which can be seen in the large increase in revenue at our filling stations over the past year. At Liqvis, we want transport companies to be able to plan the use of their vehicles as flexibly as possible. That’s why we’re continually working on expanding our network coverage. I am most confident that we will be able to open further stations in Germany and Europe over the course of this year,” said Silvano Calcagno, Managing Director of Liqvis GmbH.
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Northern Spain: NGV municipal fleet refuels for free during Covid-19 crisis
EMULSA’s (Gijón municipal company of urban environment services) vehicles powered by natural gas are refueling for free at EDP’s eco station located in
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Roces, autonomous community of Asturias. This is one of the measures that the energy company has adopted to recognize and contribute to the important work that the municipal company is carrying out these days. This initiative, which began on March 9 and that will last as long as the state of alarm is established, reinforces the agreement that both entities have maintained since 2017 regarding the promotion of sustainable mobility in Gijón. Currently, EMULSA has 15 vehicles powered by natural gas, of which four are heavy duty (waste collection and furniture trucks) and 11 are light vehicles and vans. EMULSA’s commitment to use this fleet is part of the actions that the company has been developing for years to reduce its polluting emissions and contribute to improving air quality in the city. For EDP, this initiative joins the various actions it is developing to help reduce the impact of the current situation caused by Covid-19.
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New online tool calculates benefits of converting vehicles to natural gas
Clean Energy Fuels Corp. launched an online Cost Calculator that makes it quick and easy to estimate the cost of transitioning an individual vehicle or
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entire fleet from diesel fuel to natural gas, including the estimated carbon emissions reduction. “There’s a false assumption that natural gas vehicles are more costly because they meet such high environmental standards, but that’s simply not the case,” said Chad Lindholm, Vice President of Clean Energy Fuels Corp. “Our natural gas vehicle cost calculator demonstrates the economic value of running a fleet on natural gas, and we believe users want to learn how sustainable and cost effective it can be to run a clean fleet.” Clean Energy’s Cost Calculator can be customized for specific types of natural gas vehicles, including heavy-duty trucks, shuttle and transit buses, waste vehicles, and more. It compares the annual cost of running a diesel vehicle with a natural gas vehicle, and also shows the estimated annual fuel cost, savings per year, savings over five years and savings per mile of operating a natural gas vehicle. Rounding out a trio of Clean Energy productivity tools, the Cost Calculator needs only minimal user input such as annual miles, base vehicle price and desired range to provide a comprehensive cost comparison with diesel vehicles. Clean Energy also offers an Emissions Calculator that demonstrates the environmental advantages of switching from diesel to natural gas, and a Grant Finder that identifies available supplemental funding for clean vehicles according to state.
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CNG and LNG demand increases – British
Sales of compressed natural gas (CNG) and liquified natural gas (LNG) have seen a dramatic increase during 2020, compared to last year.
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Supplier Gasrec says it saw a five-fold increase in its gas sales in its commercial vehicle refuelling network in the first quarter of 2020 compared to the same period in 2019. James Westcott, chief commercial officer at Gasrec, said: “The growth we have seen has been phenomenal, with volumes more than doubling between the final quarter of 2019 and the first quarter of 2020. Registrations of gas-powered 44-tonners has played a big role, together with the general realisation from the industry that gas represents the best opportunity right now to significantly reduce emissions and running costs.” Despite Gasrec having three supermarket chains amongst its major customers, they now expect demand for CNG and LNG to flatten off temporarily as fewer new alternatively fuelled trucks take to the road, due to the coronavirus. But volumes of gas needed by the supermarkets has increased. “One supermarket we supply doubled its demand for gas inside a week. But that’s been largely balanced, as in other areas we’ve seen a small volume of customer vehicles – those not carrying essential goods – being temporarily parked up,” added Westcott.
https://www.commercialmotor.com/news/product/frontline-increased-demand-non-essential-goods-items
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LNG as a Marine Fuel/Shipping
Spanish Port of Almería wants to offer LNG bunkering services
The Almería Port Authority (APA) is carrying out a study to supply natural gas to the ferries that operate in the port located in the southeast of Spain.
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With the availability of LNG bunkering, the APA aims to reduce emissions into the atmosphere and achieve a more sustainable port area. To carry out the study, the APA awarded the company Tramitaciones de Ingeniería para la Industria y Energía the technical assistance for the assessment and study of the supply of LNG to ferries, for an amount of 10,587 euros. Moreover, the Security Division of the Port Authority carries out a security study, prior to the start-up of the service. In order to implement the service next summer, the APA will modify the current manholes, as well as the firefighting facilities. In addition to the contribution to the sustainability of the port, the LNG bunkering operations, which will be carried out with tanker trucks, will allow the recruitment of shipping companies that operate vessels that use this economic and efficient fuel.
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Portugal: Port of Sines receives a natural gas-powered oil tanker
On April 26, the Port of Sines received the ship “Eagle Brasilia”, a dual fuel Aframax, which has the particularity of being powered by LNG. On this trip,
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the ship traveled from the port of SullomVoe, in the United Kingdom, and docked at the liquid bulk terminal to unload 100,000 tons of crude oil at the Sines refinery. The ship has a total length of 250 meters and is approximately 44 meters wide, with a maximum draft of 15.1 meters. The use of natural gas has less impact on the environment and has been identified as an available alternative for marine transport. The fuel is already used by many new ships, from RoRo-Pax (ferries) to container ships and oil tankers. It should be remembered that Sines was recently the scene of the first truck-to-ship bunkering carried out in continental Portugal, which confirms the capacity of this port infrastructure to guarantee this type of operations. The only terminal in the country prepared to handle LNG is also located in Sines.
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LR to class new LNG-fuelled ships for German Federal Administration
Shipbuilders, in agreement with BundesanstaltfürWasserbau BAW, have appointed Lloyd’s Register (LR) as the classification society for two new 95 m multi-role ships.
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The German Federal Waterways and Shipping Administration awarded this complex project to Abeking& Rasmussen Schiffs- und Yachtwerft SE. The shipbuilders, in agreement with BundesanstaltfürWasserbau BAW, subsequently appointed LR as the classification society for the ships. These next generation vessels will be capable of performing a number of tasks, such as emergency towing, fire-fighting, buoy tendering as well as oil recovery and chemical recovery operations. One of the many innovations is the ship’s propulsion concept, which uses LNG as a single fuel. LR Hamburg office will provide dedicated technical support relating to the complex regulatory framework for these multi-functional ships. Early design screening of the LNG fuel gas system layout together with many more independent verifications of the initial design concept were performed prior to the final award of the classification contract to LR. Due to the ship’s variety of special duties the system design and onboard integration is complex. For chemical recovery operations the ships are designed for a gas safe operation using a citadel concept to protect the crew from hazardous substances. The combination of an LNG propulsion concept with the special operational duties listed above makes these ships novel with unique features. Markus Büsig, LR’s M&O President for North Europe, said: “LR welcomes the opportunity to support Abeking& Rasmussen and their client with these two next-generation vessels. This is a significant achievement for the LR team as these ships will push the boundaries of flexibility and innovation.”
The ship’s design and engineering phase is underway and construction scheduled to begin in 2021 with the ships due to be delivered in 2023.
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Sohar, first Middle Eastern port joining SEA-LNG coalition
SEA-LNG, the multi-sector industry coalition created to accelerate the widespread adoption of LNG, has welcomed Sohar Port and Freezone as its
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first Middle Eastern port member. Sohar joins SEA-LNG to promote its investment in LNG bunkering facilities and the use of LNG as a marine fuel. Marsa LNG, a venture comprised of Total S.A. and OQ, is developing a state of the art LNG liquefaction plant and bunkering facility and the goal is to supply LNG to the shipping lines calling at the port. “This major LNG bunkering project will generate in-country value and job opportunities, and will support industry diversification efforts by promoting shipping activities in Oman. The establishment of this facility will make Sohar one of the key LNG bunkering facilities on the main shipping trade routes, alongside other strategic ports, many of whom are already SEA-LNG members, such as the Port of Singapore. Marsa LNG will supply LNG sourced locally in the Sultanate,” said Mark Geilenkirchen, CEO of Sohar Port. “Sohar will provide an attractive global offering once the marine bunkering project is completed. From our perspective, this is an opportune time to develop LNG capabilities in Oman given the expansive growth of marine activity within the region. We welcome Sohar to our cause of furthering the use of LNG as an important, environmentally superior maritime fuel,” commented Peter Keller, Chairman of SEA-LNG. Due to its unique location outside the Strait of Hormuz and mid-way between Europe and Asia, Sohar is ideally positioned to become a major LNG bunkering hub in the Middle East. In addition, Sohar Port and Freezone feature deep-water drafts capable of handling the largest vessels in the world. The liquefaction plant and bunkering project will be able to offer attractive business conditions, further enhanced by access to a dedicated logistics chain as well as large domestic gas reserves.
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Spain: Santander plans to become a strategic LNG bunkering port
A consortium formed by the Port of Santander, Repsol LNG Holding (RLH), ESK and Enagás will implement and improve the LNG bunkering infrastructures
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in an area of port influence of the Trans-European Global Transport Network (TEN-T Comprehensive Network) through a project that will last approximately four years and two months. This action has European aid within the CEF-Transport program, specifically in the Call for Projects on the Comprehensive Network (CEF-T-2019-1-AP-TRANSPORT) / Maritime Ports, of 6,334,607 euros to be distributed among the partners according to their activity. In the case of the Port of Santander, the amount received is 2,977,140 euros. The objective is to satisfy the necessary requirements to overcome the existing barriers in the LNG supply network, providing facilities for refueling vessels in Santander as a strategic port in northern Spain. For this, the action is based on the design and construction of an LNG bunkering terminal in the Port of Santander. This facility will be used, as a priority, for LNG bunkering to the new ships that Brittany Ferries is building, and whose first ship, Galicia, is scheduled to start operating later this year. The new ferries are prepared to use LNG as fuel, so they will be able to meet the strict SOx emission standards that came into force in 2020. The port of Santander must provide the required infrastructures, which are specified in the construction of a new Maliaño pier, sections 1-4, with an alignment of 400 m, and a ro-ro ramp, an essential complement to the traffic generated by Brittany Ferries. However, the dock and the LNG storage and supply facility for ships are expected to provide service in the future to other ro-ro traffics that the Port of Santander maintains with northern European ports. The action will be carried out in collaboration with ESK as a transport company, which will design, manufacture and operate the tank trucks that will supply the LNG to the bunker terminal from the nearest regasification terminal, and with Enagás, as an expert in LNG plant management in Spain.
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South Asia’s first LNG hybrid tug will be ready in 2020
ABB’s electric propulsion, power, energy storage, control and automation technology will be at the heart of the first tug in South Asia capable of switching
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between low emission LNG engines and zero-emission battery power. The vessel, which will operate in Singapore harbor, has been ordered by Sembcorp Marine subsidiary Jurong Marine Services for delivery from the Sembcorp Marine shipyard by the end of 2020. LNG as a fuel virtually eliminates sulfur oxide emissions, while the Maritime Port Authority of Singapore (MPA) is also incentivizing its use to support the International Maritime Organization’s aims to halve ship CO2 emissions by 2050. The project represents the first delivery of ABB’s award-winning power and distribution system Onboard DC Grid™ for a tug application. Leveraging Onboard DC Grid™, the vessel will be able to deploy 904 kWh of battery power for zero-emission operation, as well as for peak shaving – improving utilization of electricity use on board. “This is a breakthrough in the tug market for the ABB’s energy storage technologies and a strong validation of Onboard DC Grid™ as the ultimate solution for power management efficiency for hybrid propulsion,” said JuhaKoskela, Managing Director, ABB Marine & Ports. “Future-proofing for a different energy mix makes particular sense for tugs and other port service vessels, as the most likely candidates to face imminent environmental restriction. This is also a great example of a local team meeting a regional priority by realizing ABB’s ‘Electric. Digital. Connected.’ vision.” Gas fueled engines face a particular challenge when it comes to handling the fast-changing load capabilities demanded by tugs. Leveraging the Onboard DC Grid™ system, the tug’s engines will be able to run at variable speeds for optimized LNG fuel economy at each load level. Additionally, through integration with an energy storage source, the batteries will be able to provide power to the tug’s propulsion system almost instantaneously. Leveraging the capabilities of Onboard DC Grid™, the LNG engines will not have the need to be tied to a fixed speed against dynamic loads, and would be able to provide energy at variable revolutions per minute (RPM), further enhancing efficiency, responsiveness and sustainability of tug operations.
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Technological Development for Cleaner and Greener Environment Hydrogen & Bio-Methane
Renewable natural gas as vehicle fuel grows nearly 300% in five years
Natural Gas Vehicles for America (NGVAmerica) and Coalition for Renewable Natural Gas (RNG Coalition) announced that 39% of all on-road fuel used
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in natural gas vehicles in calendar year 2019 was renewable natural gas. Captured above ground from organic material in agricultural, wastewater, landfill or food waste, biomethane produces carbon-neutral and even carbon-negative results when fueling on-road vehicles like short- and long-haul trucks, transit buses, and refuse and recycling collection vehicles. Over the last five years, biomethane use as a transportation fuel has increased 291%, displacing close to 7.5 million tons of carbon dioxide equivalent (CO2e). NGVAmerica and RNG Coalition report that in 2019 a total of 717 million gallons (GGE) of natural gas were used as motor fuel. Of that, 277 million gallons (GGE) were renewable. “Renewable natural gas fueled vehicles are the most immediate and cost-effective heavy-duty option when seeking to combat climate change and clear our air,” said Dan Gage, President of NGVAmerica. “Respiratory health depends on clean air, and natural gas fueled vehicles provide a proven, affordable, and easily scalable zero emission equivalent solution for commercial deployment today.” “Renewable natural gas supply is growing,” said Johannes Escudero, CEO of RNG Coalition. “With 110 biogas production facilities transforming waste into fuel, and another 100 facilities on the way, we are increasingly able to offer consumers the opportunity to decarbonize with biomethane – the cleanest of any fuel available today.” Biomethane use has eliminated 7,482,936 metric tons of CO2e over the last five years. Put into perspective, it is:
Lowering greenhouse gas emissions (GHG), equivalent to removing the GHG from 18,568,079,404 miles driven by the average passenger car, or from 745,676 trips around the earth;
Reducing CO2 emissions, equivalent to removing CO2 emission from 842,009,227 gallons of gasoline, or the total amount of fuel used annually by 63,171 transit buses; and
Sequestering carbon, equal to growing 123,731,931 tree seedlings for ten years, or 9,772,367 acres of U.S. forests for one year.
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Hydrogen fuel cell technology for large ocean ships advances in Europe
ABB has signed a Memorandum of Understanding (MOU) with Hydrogène de France (HDF) to collaborate on the assembly and production of fuel cell systems for
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marine applications, more specifically for ocean-going vessels. Fuel cells are widely considered as one of the most promising solutions for reducing harmful pollutants. Already today, this zero-emission technology is capable of powering ships sailing short distances. Building on an existing collaboration with Ballard Power Systems, ABB and HDF intend to optimize fuel cell manufacturing capabilities to produce a megawatt-scale power plant for marine vessels. The new system will be based on the megawatt-scale fuel cell power plant jointly developed by ABB and Ballard, and will be manufactured at HDF’s new facility in Bordeaux, France. “With the ever-increasing demand for solutions that enable sustainable, responsible shipping, we are confident that fuel cells will play an important role in helping the marine industry meet CO2 reduction targets,” said JuhaKoskela, Managing Director, ABB Marine & Ports. “Signing the MOU with HDF brings us a step closer to making this technology available for powering ocean-going vessels.” With shipping responsible for about 2.5% of the world’s total greenhouse gas emissions, there is an increased pressure for the maritime industry to transition to more sustainable power sources. The International Maritime Organization has set a global target to cut annual emissions by at least 50% by 2050 from 2008 levels. Among alternative emission-free technologies, ABB is already well advanced in collaborative development of fuel cell systems for ships.
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Fleet of 20 hydrogen-fueled buses to hit streets of South Holland in 2021
A contract for the delivery of 20 Solaris Urbino 12 hydrogen buses was signed by representatives of Solaris Bus & Coach S.A. and the operator Connexxion
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providing transport services for South Holland province. The vehicles are expected to be delivered in 2021. South Holland is the most populous province of The Netherlands, located in its western part, along the North Sea coast. “Our roads are becoming busier and busier. The health of our passengers and residents is of utmost importance to us, therefore putting into service of vehicles ensuring cleaner air is a great step forward“, said Floor Vermeulen, regional minister for Traffic and Transport in South Holland province. “More and more municipal operators and decision makers opt for modern and emission-free transport solutions for their regions. The advantages of hydrogen as an energy carrier are indisputable. We are honored to be able to participate with the operator Connexxion in these forward-looking decisions“, commented Petros Spinaris, Deputy CEO of Solaris Bus & Coach S.A. The vehicles will be operated by Connexxion, a branch of the Transdev Netherlands group which is one of the biggest operators and a leader in emission-free public transport in the Netherlands. As of the end of next year, Connexxion will utilize hydrogen buses in HoekseWaard and Goeree-Overflakkee regions.
The technologically advanced Solaris Urbino 12 hydrogen buses use a set of fuel cells with a power of 70 kW. As for the hydrogen storing technology, the Urbino 12 features cutting-edge solutions. The hydrogen is stored in gaseous form in 5 new-generation tanks placed on the bus roof. The set of type 4 composite tanks, placed longitudinally above the first axle of the vehicle, has a total volume of 1,560 liters. The energy needed to power the bus is produced in the fuel cell that is supplied with hydrogen stored in roof-mounted tanks. Refueling of hydrogen buses will be possible in Heinenoord, in the vicinity of the bus depot. As hydrogen is becoming an increasingly popular energy source, private passenger cars will also be allowed to use the infrastructure. The initiative aims at promoting the exploitation of the environmentally-friendly hydrogen to a full extent.
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RNG Coalition: RNG on-road fuel use continues to grow
Natural Gas Vehicles for America (NGVAmerica) and Coalition for Renewable Natural Gas (RNG Coalition) today announced that 39 percent of
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all on-road fuel used in natural gas vehicles in calendar year 2019 was renewable natural gas (RNG). Captured above ground from organic material in agricultural, wastewater, landfill or food waste, RNG produces carbon-neutral and even carbon-negative results when fueling on-road vehicles like short- and long-haul trucks, transit buses, and refuse and recycling collection vehicles. RNG fuel has the lowest EER-adjusted carbon intensity of any on-road motor fuel, as low as -400.1 Over the last five years, RNG use as a transportation fuel has increased 291 percent, displacing close to 7.5 million tons of carbon dioxide equivalent (CO2e). NGVAmerica and RNG Coalition report that in 2019 a total of 717 million gallons (GGE)2 of natural gas were used as motor fuel. Of that, 277 million gallons (GGE) were renewable.3 “Renewable Natural Gas supply is growing,” said Johannes Escudero, CEO of Coalition for Renewable Natural Gas. “With 110 RNG production facilities transforming waste into fuel, and another 100 facilities on the way, we are increasingly able to offer consumers the opportunity to decarbonize with RNG – the cleanest of any fuel available today.” RNG motor fuel use has eliminated 7,482,936 metric tons of CO2e over the last five years. Put into perspective, RNG motor fuel is:
- Lowering greenhouse gas emissions, equivalent to removing the GHG from 18,568,079,404 miles driven by the average passenger car, or from 745,676 trips around the earth;
- Reducing CO2 emissions, equivalent to removing CO2 emission from 842,009,227 gallons of gasoline, or the total amount of fuel used annually by 63,171 transit buses; and
- Sequestering carbon, equal to growing 123,731,931 tree seedlings for ten years, or 9,772,367 acres of U.S. forests for one year.
https://biomassmagazine.com/articles/16975/rng-coalition-rng-on-road-fuel-use-continues-to-grow
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Port of Seattle will halve emissions with 100% biomethane shuttle buses
The Port of Seattle Commission approved a contract to enable the Port to reach its 2030 goal to reduce carbon emissions by 50%, almost a decade early.
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This long-sought major milestone, voted on at the Commission meeting on April 14, 2020, results from authorization for a 10-year contract with U.S. Gain for the supply of renewable natural gas. The fuel delivery begins October 1, 2020. The $23 million contract allows the Port to purchase enough fuel to heat 55% of the Seattle-Tacoma International Airport (SEA) terminal and to power 100% of its bus fleet to reach its 50% port-wide carbon reduction goal. SEA will be the first airport in the country to utilize renewable natural gas for heating. “The Commission vote is another example of the Port’s environmental leadership, even in hard times,” said Commission Vice President Fred Felleman and founding chair of the Energy and Sustainability Committee. “While it’s critical that immediate attention is given to recovery from the COVID-19 crisis, we must continue to reduce our carbon footprint if we are to avoid the long-term economic and human costs associated with the climate crisis.”
“We are honored to supply renewable natural gas to SEA and applaud them on achieving such an incredible milestone, well ahead of schedule,” said Bryan Nudelbacher, director of RNG business development with U.S. Gain. “It is the immediate solution to reduce thermal and transportation-related carbon emissions and because of this, we’re committed to developing new projects that expand access to others seeking sustainability wins, like SEA.”
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