NGS’ NG/LNG SNAPSHOT – OCTOBER 2019, VOLUME II

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City Gas Distribution & Auto LPG

Indraprastha Gas gains after Govt authorization for Ghaziabad CGD network

Indraprastha Gas rose 1.05% to Rs 376 after the central government authorized the company for development of city gas distribution network in Uttar Pradesh. Indraprastha Gas (IGL) said it received letter dated 11 October 2019 from Petroleum and Natural Gas Regulatory Board (PNGRB)

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regarding acceptance of central government authorization to IGL for Ghaziabad city gas distribution (CGD) network (Ghaziabad and Hapur districts). PNGRB granted infrastructure exclusivity for laying building or expansion of the CGD network during the economic life of the project (25 years) i.e upto year 2032 considering the year 2007 as the start of the CGD activity for the said project. PNGRB also granted exclusivity from the purview of the contract carrier or common carrier for five years from the date of issue of acceptance of central government authorization. The announcement was made after market hours on Friday, 11 October 2019. Shares of Indraprastha Gas soared 8.09% to its current market price of Rs 376 in five trading sessions from its previous closing low of Rs 347.85 on 4 October 2019. Meanwhile, the S&P BSE Sensex was up 243 points or 0.64% to 38,370.42. On the BSE, 17,211 shares were traded in the IGL counter so far compared with average daily volumes of 64,094 shares in the past two weeks. The stock hit an intraday high of Rs 378 and an intraday low of Rs 374 so far during the day. The stock hit a 52-week high of Rs 378.05 on 11 October 2019. The stock hit a 52-week low of Rs 225 on 11 October 2018. Indraprastha Gas’ consolidated net profit rose 31.1% to Rs 245.04 crore on 22.3% surge in net sales to Rs 1,576.12 crore in Q1 June 2019 compared with Q1 June 2018. IGL’s business consists of sale of natural gas. The firm is focused on industrial and commercial business.

https://www.business-standard.com/article/news-cm/indraprastha-gas-gains-after-govt-authorization-for-ghaziabad-cgd-network-119101400298_1.html

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Total purchases 37.4 per cent of Adani Gas for more than Rs 5,500 crore

NEW DELHI:  French energy giant total has acquired a 37.4% stake in Adani Gas for more than Rs 5, 500 crore, according to a statement from the company on Monday (Oct 14).  

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This will be the largest foreign direct investment (FDI) in India’s burgeoning city gas distribution sector, with both total and the Adani Group ending up with 37.4 per cent stake each. The Adani family currently holds a 74.8% stake in Adani Gas. “Total will purchase 37.4% shares in Adani Gas Ltd through a tender offer to public shareholders to acquire up to 25.2% shares subject to applicable regulations and purchase the residual shares from Adani Family,” it said. According to Adani, the partnership and equity support from the partners will help Adani Gas Limited accelerate project executions in all its new geographical areas, while Adani Gas shall also pursue a fuel retail business in India and with a target to establish 1,500 fuel stations. Adani Gas will also set up 1,500 compressed natural gas (CNG) stations for gas distribution over the next ten years in it and its joint venture’s geographical areas in 71 districts, 68 towns spread across 15 states in India. Adani Gas is already the country’s biggest private city gas distribution company with exclusive authorisation to develop infrastructure, operate and market gas in 38 geographical areas and supply both piped natural gas and CNG to customers. “Total’s investment in Adani Gas reinforces the country’s natural gas and demand potential. The partnership will derive significant synergies between Adani’s capabilities of developing world-class assets and Total’s global best practices as well as leveraging business synergies across LNG, Fuel Retail and City Gas distribution,” said Gautam Adani, chairman, Adani Group.

http://www.newindianexpress.com/business/2019/oct/15/total-purchases-374-per-cent-of-adani-gas-for-more-than-rs-5500-crore-2047584.html

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A first for NCR: Piped gas gensets for 5 city societies

The PNG generators will be retrofitted in the existing DG sets using Italian technology. In an effort to reduce pollution ahead of winter, some apartment buildings in Noida have started testing piped gas for power backup.

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This is the first time that a residential society in National Capital Region (NCR) will have gas-based generator sets. On Monday (Oct 7), the Environment Pollution Control Authority (EPCA) had said with effect from October 15, measures under Graded Response Action Plan (GRAP) would include a ban on diesel generator (DG) sets in Delhi and parts of NCR, including Ghaziabad, Noida, Greater Noida, Faridabad, Gurgaon, Sonipat, Panipat and Bahadurgarh. As part of a pilot project with IGL Limited, five societies in Noida — Stellar Kings Court, Antriksh Greens, Shubhkamna Apartments and Marvel Homes in Sector 50, and Mahagun Maple in Sector 61 — will install gas pipelines to run their power backup systems. The PNG generators will be retrofitted in the existing DG sets using Italian technology. Since most societies already have piped gas for kitchen use, no additional infrastructure for laying the pipelines will be required, said IGL officials. The officials added that a minimum generator size of 125 KV would be required to retrofit the gas generators. Approximately, Rs 4,000-5,000 would be spent per KV. “Natural gas generators will be less polluting, won’t need additional infrastructure and be approximately 33% cheaper than diesel generators. Since the entire system is online, there are no spillage concerns or maintenance issues,” said an IGL Limited spokesperson. IGL officials told TOI that a partial test was done a year ago wherein some percentage of a diesel generator set of a highrise society in Sector 135 had been converted for backup through piped gas. However, this is the first time that the DG sets will be fully converted to piped gas gensets. Welcoming the move, residents said that switching to gas generators will not only reduce carbon emissions and help control pollution, it will also reduce the overall cost of power backup by almost half. “All societies charge approximately Rs 15-25 per unit for power backup using diesel gensets. With piped gas, the backup would cost Rs 10-15 per unit. IGL has tied up with another agency that will install the system,” said Punit Sharma, a member of the Noida Federation of Apartment Owners’ Associations (NOFAA).

https://energy.economictimes.indiatimes.com/news/oil-and-gas/a-first-for-ncr-piped-gas-gensets-for-5-city-societies/71497887

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GAIL targets 11.44 lakh piped cooking gas connections in FY20; PM’s 1 cr target set to be missed

State-owned GAIL India Ltd and its affiliates have set a target to provide 11.44 lakh piped cooking gas connections in the current fiscal as they chase what now looks like a highly improbable target of connecting one crore households with environment-friendly fuel by next year.

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GAIL and its joint ventures such as the ones that retail CNG and piped cooking gas in Delhi and Mumbai had achieved just 60% of the target to give 11.25 lakh connections in the 2018-19 fiscal year, according to company’s target document reviewed by. In March 2015, Prime Minister Narendra Modi had pledged to provide piped natural gas connections to one crore households “in the next four years”. India had about 26 lakh households using gas received from a pipeline in the kitchen in 2015 and the government was keen for a massive expansion of piped cooking gas to help cut down the usage of subsidised LPG. LPG thus freed can be used to replace kerosene and forest wood for cooking in rural and remote areas. Later, the one crore deadline was pushed back by a year to 2020. But even this delayed deadline now looks improbable to achieve. Together with other private city gas distribution firms, piped cooking gas users in India rose from 42.65 lakh in March 2018 to over 52 lakh a year later. This has risen to 54.17 lakh as on September 1, according to the oil ministry’s Petroleum Planning and Analysis Cell (PPAC). Industry officials said the biggest push for piped cooking gas use would come when entities that have been authorised by Petroleum and Natural Gas Regulatory Board (PNGRB) in two bid rounds in the last one-year start work. When they come on stream, such users will jump many fold, they said. To achieve Prime Minister’s target of 1 crore piped natural gas users by 2020, a massive 45 lakh connections will have to be given in one year. But the biggest city gas distribution group GAIL is only targeting 11.44 lakh in year to March 31, 2020, according to the company document. This target comprises 3.4 lakh new connections each in the national capital region and Mumbai and adjoining towns, and another 1.43 lakh in Pune. This target compares to 11.02 lakh piped natural gas users in the national capital region and 12.77 lakh in Mumbai and adjoining cities, according to the GAIL document. In 2018-19, GAIL and its affiliates had targeted 3 lakh connections in the national capital region (NCR) and Mumbai and adjoining cities. Against this, Indraprastha Gas Ltd issued a record 2.1 lakh connections while Mahanagar Gas Ltd enrolled 1.68 lakh new users.

Pune currently has 1.68 lakh users getting piped natural gas in their kitchens. Other cities where GAIL and its affiliates are targeting new users include Kanpur, Agra and Lucknow in Uttar Pradesh, Indore and Ujjain in Madhya Pradesh, Kakinada, Vijayawada in Andhra Pradesh and Hyderabad in Telangana.

https://economictimes.indiatimes.com/industry/energy/oil-gas/gail-group-targets-11-44-lk-piped-cooking-gas-connections-in-fy20-pms-1-cr-target-set-to-be-missed/articleshow/71409039.cms?from=mdr

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CNG to be cheaper by ₹2.04 in Mumbai, PNG by ₹1.19 per unit: MGL

Mahanagar Gas Limited (MGL) announced that the prices of compressed natural gas (CNG) would be cut by ₹2.04 per kg and piped natural gas (PNG) by ₹1.19 per standard cubic metre (SCM), starting Friday (Oct. 4).

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According to a statement by the MGL, CNG will now cost ₹49.95 per kg, while PNG will cost ₹30.60 per SCM for the first slab and ₹36.20 per SCM for the second slab. The reduction is “consequent to the reduction in price of domestically produced natural gas by Government of India,” reads the MGL statement. Meanwhile, petrol and diesel prices – at ₹80.11 per litre and ₹70.69 per litre on Thursday – continued to rise. After the fare revision, vehicle owners will save 55% and 29% against the current petrol and diesel prices, said MGL. Around 12 lakh households and seven lakh vehicles in and around Mumbai depend on MGL’s PNG and CNG supply, respectively.

https://www.hindustantimes.com/mumbai-news/cng-to-be-cheaper-by-2-04-in-mumbai-png-by-1-19-per-unit-mgl/story-BMlMLho0aAHnhNf27vabTN.html

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Compensate us for higher upkeep costs: Auto unions, Maharashtra

Mixing of rich gas with CNG, following the Uran ONGC fire, has forced many drivers to get vehicles repaired weekly. Plagued with mounting losses owing to an increase in maintenance costs of autorickshaws

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after being supplied with Compressed Natural Gas (CNG) mixed with rich gas – a heavier variant of natural gas, auto unions are urging to be compensated by the transport authorities. Thampi Kurian, general secretary of Mumbai Rickshawmen’s Union, stated in a letter to the Maharashtra government that there is no clarity on when the problem will be resolved. Most of the CNG pumps operated by Mahanagar Gas Limited (MGL) have been receiving mixed CNG gas after a fire broke out at the Uran plant of ONGC. The rich gas costs more to auto drivers as a larger quantity is required to fill the cylinder, as against lean CNG gas. Moreover, the impurities in it choke the nozzle of the auto, causing the engine to abruptly stop. The gas also causes accumulation of a thick black liquid inside the cylinders which has to be cleaned on a weekly basis. In the letter, Kurian stated that while earlier, a gas cylinder had to be taken for maintenance once in three years, in less than a month since the problem started, the auto drivers have had to rush to mechanics every week to clear the cylinder of this black residue. The process involves complete emptying of the cylinders which results in wastage of fuel. The unions had initiated a signature campaign by the affected drivers and sent a letter to the government demanding a meeting with officials from both the transport department and the MGL. The meeting has been scheduled for October 10. Kurian told Mirror, “Auto drivers are spending more time queuing at the garages than on roads. The government should pay for the losses incurred which go up to Rs 2000-2500. If our demands are not heard, we will have no option but to agitate and subsequently approach the court.”

https://mumbaimirror.indiatimes.com/mumbai/other/compensate-us-for-higher-upkeep-costs-auto-unions/articleshow/71461187.cms

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IGL announces reduction in CNG price

In a bid to give a major relief for CNG consumers in the national capital, the largest CNG distribution company ‘ Indraprastha Gas Limited’ (IGL) on Wednesday (Oct. 3) announced a reduction in the selling prices of CNG consequent upon notification of government of India reducing the prices of domestically produced natural gas.

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The IGL claimed that the price of CNG in Delhi continues to remain lowest in the entire country. It also announced a new cash back scheme for CNG fueling through IGL Smart Card during off peak hours at IGL CNG Stations. According to revise prices would be in a decrease of Rs 1.90 per Kg in the consumers prices in Delhi and Rs 2.15 per kg in Noida, Greater Noida and Ghaziabad. The new consumer price of Rs 45.20 per kg in Delhi and Rs 51.35 per kg in Noida, Greater Noida & Ghaziabad would be effective from 6 am on Thursday. The price of CNG being supplied by IGL in other areas shall remain unchanged as of now. In order to promote CNG fueling during night, a discount of Rs 1 per kg shall be offered by IGL on the selling prices of CNG for filling between 12 am to 6 am at select outlets in Delhi, Noida, Greater Noida and Ghaziabad from now. Thus, the consumer price of CNG would be Rs. 44.20 per kg in Delhi and Rs 50.35 per kg in Noida, Greater Noida and Ghaziabad during 12 am to 6 am at the select CNG stations. In addition to the above, with a view to promote cashless transactions and push CNG refueling during off-peak hours, IGL has introduced a special cash back scheme of Re 0.50 per kg for CNG fueling done only at IGL CNG Stations through IGL Smart Cards between 11 am to 4 pm and 12 am to 6 am.

http://www.millenniumpost.in/delhi/igl-announces-reduction-in-cng-price-377535

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Electric Mobility

Lower toll for EVs on the cards to push green mobility

The highways ministry had hired Boston Consultancy Group (BCG) to prepare a draft toll policy with NHAI.

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India is weighing the option of concessional toll rates for electric vehicles as it looks to incentivise adoption of clean mobility solutions, a move that may be reflected in the revamped toll policy that the government’s transport wing is working on, officials aware of the matter said. The road transport and highways ministry is ramping up the work on the new toll policy, which may also consider exempting electric vehicles from toll fee or provide up to 50% discount on such tolls for electric vehicles. This proposal assumes significance amid government’s push to incentivise the adoption of electric vehicles, as it also recently cut goods and services tax on EVs. Transport minister Nitin Gadkari had recently said that the government will not impose a deadline for transition to electric vehicles. The National Highways Authority of India (NHAI) has sent out the draft toll policy for consultation in the nodal ministry of road transport and highways which will be sent for Gadkari’s approval soon. “NHAI has suggested several changes in the toll policy. Exemption is one of them,” an official told ET. The highways ministry had hired Boston Consultancy Group (BCG) to prepare a draft toll policy with NHAI. A second official said that NHAI had suggested exemption of EVs from toll payment, but it may take away the revenues of NHAI, and private concessionaires may want to be compensated for this loss from the highways building authority. “Providing some sort of concession is a better way, so the revenues of NHAI are protected,” said the official. “In the draft toll policy, NHAI has suggested that electric vehicles should be given 50% concession on toll rates, so that the government is able to encourage people to buy EVs,” a third official said. “The concession will be applicable for the first five years from the date the policy is announced,” the official said.

https://energy.economictimes.indiatimes.com/news/power/lower-toll-for-evs-on-the-cards-to-push-green-mobility/71513868

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Experts come together at EMobility Summit to discuss green commuting

Govt’s commitment can be gauged from the fact that it has lowered the GST on EVs: Gadkari; India’s ambitious target to shift to electric vehicles is a bumpy road ahead, say experts;

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Global leaders from the sector worry that regime change will also lead to an altered policy. Keeping with its tradition to keep pace with ideas that will shape the future, Zee Media’s WION channel organised EMobility Summit at New Delhi’s Taj Mansingh hotel on Tuesday to look at the viability of green commuting and the roadblocks and challenges it faces. Apart from having Union Minister for Road Transport and Highways, Micro, Small & Medium Enterprises, Nitin Gadkari, as chief guest to speak on the broad policy issues and roadmap for Electric Vehicles, the EMobility Summit had panned out the discussions in four sessions to have a holistic view of the industry with a diverse flavour of panelists from the industry as well as experts from the field of environment. In his inaugural address, Gadkari said, the government is neither for restricting nor opposing any type of vehicle but is only supporting the EVs and wants to leave the industry for an open competition. Flagging the need to curb pollution to help mitigate climate change, Gadkari said, his government is adopting an integrated approach to solve India’s pollution conundrum. “We are installing a technical testing institute in Pune, we will start accepting on the basis of different part of the world practices around, Gadkari said, adding, “we are also taking the help of IIT’s as well. Niti Aayog also has made up a group on the same. You saw what happened with mobile phones and TVs.” The minister asserted that he sees a huge possibility in developing India into manufacturing hub of EVs for which his department has prepared a policy and is looking forward to getting it cleared and approved by the Union cabinet. The auto industry is currently going through some problems due to demand and supply and in the global economic and business cycle. But we need to modernise industry and we are all supporting innovation and to make it happen supporting industry and new research, emphasised Gadkari.

“We are looking for every possible option, whether it is converting to CNG or using biodiesel that can be a saving for the economy and create jobs for tribals. Nothing is mandatory,” said Gadkari asserting that India frog jumped from BS-IV to BS-VI to take care of pollution and health concerns as the government is committed to clean India and successfully implementing it.

https://www.dnaindia.com/business/report-experts-come-together-at-emobility-summit-to-discuss-green-commuting-2793858

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Gas/ Pipelines/ Company News

Investments in the energy sector in India recorded second highest growth in the world: Dharmendra Pradhan

Investments in India’s energy sector are among the highest in the world , according to Minister for Petroleum and Natural Gas, Dharmendra Pradhan. “We have taken several measures

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to overhaul the hydrocarbon policy framework to ensure investor friendly environment. International Energy Agency in its latest report noted that during the period 2015 to 2018, investments in the energy sector in India had recorded the second highest growth in the world,” Pradhan said at the opening ceremony of India Energy Forum by CERAWeek. “Today India is 6th largest economy in the world and the 3rd largest energy consumer after US and China. India will be the key driver of global energy demand in the coming decades,” Pradhan said. Pradhan also reiterated the target to transform India from the current 2.8 trillion economy to a five trillion dollar economy by 2024.

https://www.thehindubusinessline.com/economy/investments-in-the-energy-sector-in-india-recorded-second-highest-growth-in-the-world-dharmendra-pradhan/article29678291.ece

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BPCL nationalisation act repealed in 2016; way clear for privatisation

Ahead of a proposed move to fully privatise state-owned fuel retailer Bharat Petroleum Corp Ltd (BPCL), the government had repealed the legislation that had nationalised the company, doing away with the need to seek Parliament nod before selling it off to private and foreign firms.

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The Repealing and Amending Act of 2016 had annulled “187 obsolete and redundant laws lying unnecessarily on the Statue-Book” including the Act of 1976 that had nationalised erstwhile Burmah Shell. “The Act has been repealed and there is no need for a Parliament approval for strategic sale of BPCL,” a senior official said. Keen to get multi-nationals in domestic fuel retailing to boost competition, the government is mulling selling most of its 53.3 per cent stake in BPCL to a strategic partner. Privatisation of BPCL will not just shake up the fuel retailing sector long dominated by state-owned firms but also help meet at least a third of the government’s Rs 1.05 lakh crore disinvestment target. BPCL at the close of market on October 4 had a market capitalisation of about Rs 1.11 lakh crore and a government stake sale could get upwards of Rs 60,000 crore including a control-and-fuel-market-entry premium, officials said. The Supreme Court had in September 2003 ruled that BPCL, as well as Hindustan Petroleum Corporation Ltd (HPCL), can be privatised only after Parliament amends a law it had previously passed to nationalise the two firms. The ruling had followed a plan of the then BJP-led NDA government headed by Prime Minister Atal Bihari Vajpayee to privatise the two firms. The apex court ruling had stalled the plan to sell 34.1 per cent out of government’s 51.1 per cent stake in HPCL to a strategic partner along with management control. Reliance Industries Ltd, BP plc of UK, Kuwait Petroleum, Petronas of Malaysia, the Shell-Saudi Aramco combine and Essar Oil had expressed their interest in acquiring that stake before the Supreme Court stalled the process. But the Supreme Court mandated condition is no longer applicable, they said citing the May 9, 2016, Gazette notification following President’s assent to The Repealing and Amending Act, 2016.
BPCL was previously Burmah Shell, which in 1976 was nationalised by an Act of Parliament. Burmah Shell, set up in the 1920s, was an alliance between Royal Dutch Shell and Burmah Oil Co and Asiatic Petroleum (India).
BPCL operates four refineries at Mumbai, Kochi in Kerala, Bina in Madhya Pradesh and Numaligarh in Assam with a combined capacity to convert 38.3 million tonnes of crude oil into fuel. It has 15,078 petrol pumps and 6,004 LPG distributors.

Source: ET EnergyWorld[Edited]

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ONGC planning to drill 24 wells in Cauvery Asset at a cost of Rs 672 crore

Oil and Natural Gas Corporation (ONGC), India’s largest petroleum explorer, plans to drill 24 exploratory wells in a new block in Cauvery asset off the east coast won under the third round of

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Open Acreage Licensing Policy (OALP) at a cost of Rs 672 crore. The block lies in onland part of Ramanathapuram and Sivaganga Districts in Tamil Nadu and in shallow offshore of Bay of Bengal. ONGC expects finding around 25-30 Million Tonne of Oil and Oil Equivalent of Gas reserves through drilling of the proposed wells. “Based on the Geological & Geophysical Studies in the area, five prospects have already been identified within the area. To test and establish the hydrocarbon potential within the block, ONGC is planning to drill 24 exploratory or appraisal wells (as per tentative plan),” the company said in an application to the environment ministry. The company said it has already explored reserves in and around the block area under the nomination regime and persistent probing resulted in the discovery of Perungulam Field in 1994, Periyapattinam Field in 1997, Ramanavalasai Field in 1997, Kanjirangudi Field in 2001 and PBS-1-1 Field in 2001. The state-owned firm had earlier this year applied to the ministry to drill 104 wells in the asset at a cost of Rs 1,560 crore. It has also identified 9 sites in the Cauvery basin for exploration of shale gas and oil. Political parties in Puducherry and Tamil Nadu have been protesting against hydrocarbon projects citing environmental damage. The oil and gas producer had earlier this year announced its plan to spend Rs 83,000 crore for developing 25 projects. That is expected to yield 180 million tonne of oil and oil equivalent of gas in their life cycle. In the current financial year ending March 2020, it plans to spend around Rs 32,920 crore.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/ongc-planning-to-drill-24-wells-in-cauvery-asset-at-a-cost-of-rs-672-crore/71471867

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Policy Matters/ Gas Pricing/Others

Pitch to include gas, ATF in GST

I make a strong appeal to the finance minister to take this up with the GST Council: Pradhan. Oil minister Dharmendra Pradhan on Monday (Oct 14) made a pitch to include natural gas and aviation turbine

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fuel within the ambit of the GST to reduce multiplicity of taxes and improve the business climate. He also expressed hope that India will see an investment of $118 billion in oil and gas exploration as well as in setting up of natural gas infrastructure in the next few years. “I make a strong appeal to the finance minister to take this up with the GST Council and at least make a beginning by including natural gas and ATF in the GST,” Pradhan said at India Energy Forum of CERAWeek here.

https://www.telegraphindia.com/business/pitch-to-include-gas-atf-in-gst/cid/1711718

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India cuts natural gas price by over 12 per cent

The government cut domestic natural gas price for the first time in two-and-a-half years but rates for gas produced from difficult fields such as Reliance Industries‘ under-development fields in KG-D6 block are still at almost the same level as the one fixed during the Congress-led UPA regime.

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The price of most of the natural gas produced by state-owned ONGC and Oil India Ltd, which account for bulk of India’s existing gas output, was cut to USD 3.23 per MMBtu for the six-month period beginning October 1, from USD 3.69 as of now, according to the oil ministry’s Petroleum Planning and Analysis Cell (PPAC). This is the first reduction in rate since April 1, 2017. Simultaneously, the government cut the price of gas produced from difficult fields to USD 8.43 from USD 9.32, the PPAC notification said. The rates, besides dictating the price of urea, electricity and CNG, also decide the revenue of gas producers such as Oil and Natural Gas Corp (ONGC) and Reliance Industries. The Modi government, after storming to power in 2014, had scrapped the gas pricing formula approved by the previous Congress-led UPA regime. The Congress government had approved pricing of all domestically produced natural gas at an average of netback price that LNG exporters to India got and the rate commanded by global gas producers. The price according to this formula, which was recommended by a high-power committee headed by C Rangarajan, came to about USD 8.4 per MMBtu on April 1, 2014, as compared to USD 4.2 price prevalent then. The Modi government replaced this formula with the average rate prevailing in gas exporting countries such as the US, UK, Canada, and Russia. This tempered down the rates to USD 5.05 when it was implemented from November 2014. But subsequently, the rates kept falling and producers did not find them remunerative enough to invest in development of new discoveries and fields. This prompted the government to price gas from yet-to-be-developed difficult fields such as deepsea and high-pressure-high-temperature fields at a higher cap price arrived at by using rates of alternate fuels. The cap price for difficult fields, when implemented from April 2016, came to USD 6.61 per MMBtu as compared to USD 3.06 per MMBtu rate for existing producing fields of ONGC and Reliance. Industry officials explained that the price as per the Rangarajan formula too would have declined in 2015 and 2016 following a global slump in gas prices, which was the benchmark used. Gas price according to the Rangarajan formula was at par or lower than the difficult field price. This cap price would apply to Satellite, R-Series and MJ discoveries of Reliance in the KG-D6 block.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/india-cuts-natural-gas-price-by-over-12-per-cent/71384210

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Cut in gas prices to help GAIL, end users; ONGC & Oil India may take a hit though

The cut in prices of domestically produced gas augurs well for companies such as GAIL as well as natural gas end-users including power, fertilisers and sponge iron companies,

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as it decreases the cost of manufacturing of urea, petrochemicals and power, which use natural gas as a feedstock, said analysts. However, they said, the impact on city gas distributing (CGD) companies is neutral since they will lower prices 3-4% to pass on the benefit to consumers and negative for companies such as ONGC and Oil India. The government has reduced the domestic natural gas price, APM and high pressure, 12.5% and 9.5%, respectively, applicable for the October 2019-March 2020 period. “We see 2.5% and 5% reduction in FY20 and FY21 earnings for ONGC and Oil India and an increase of 1% and 1.5% for GAIL,” said Harshvardhan Dole, analyst, IIFL Securities. “Separately, gas-based independent power producers such as NTPC should witness 5-6% decrease in their overall cost of generation.” “A 12.5% fall in natural gas prices augurs well for natural gas endusers as it decreases the cost of manufacturing of urea and petrochemicals where natural gas is used as a feedstock,” said Urvisha Jagasheth, research analyst, CARE Ratings. “Decrease in price of natural gas will also be beneficial for the margins of the power sector and sponge iron industry where it is used for the generation of energy.”Out of the 31 urea plants in India, 28 use natural gas as a feedstock, which accounts for 80% of the raw material cost for urea manufacturing. “As per our estimates, a 12.5% fall in natural gas prices could potentially lead to a 6% decrease in the cost of production of urea, thus decreasing the working capital intensity of fertiliser manufacturers,” said Jagasheth of CARE Ratings. India is heavily dependent on coal-fired power plants for power. Natural gas accounts for only 3-4% of the total power generated. Thus the decrease in price will not provide a major relief to the power sector, according to analysts. The power sector is grappling with inadequate availability of natural gas.

https://economictimes.indiatimes.com/markets/stocks/news/cut-in-gas-prices-to-help-gail-end-users-ongc-oil-india-may-take-a-hit-though/articleshow/71416072.cms

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Delhi to lead Indian trucking into gas age

Delhi will lead Indian trucking into the gas age. Indraprastha Gas Ltd, the capital’s sole supplier of compressed natural gas, is working on a plan to convert the fleet of heavy-duty trailers

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hauling containers between the Tughlaqabad inland port and the industrial belt stretching up to Rewari in Haryana. “TCI has a fleet of 40 trailers. We are discussing converting them to LNG (liquefied natural gas), beginning with nine vehicles. LNG is clean-burning fuel and will help reduce emission from heavy vehicles,” IGL managing director E S Ranganathan told TOI. This will be the first commercial trucking operation in the country – once it starts –and mark Indian transport sector’s entry to the LNG covenant. For a country where the transport sector guzzles 40% of diesel sales, the environmental benefit from LNG, in terms of reduced vehicular pollution, will be huge. China and the US are currently the world leaders in converting their highway freight service. Ranganathan said conversion of each trailer will cost Rs 9 lakh and take about three months since it would entail importing fuel tanks etc. “LNG will be cheaper than diesel. Savings on fuel cost and green entry tax of Rs 6,000 together will pay back the cost of conversion in seven months. We have offered a financial model to fund the conversion,” Ranganathan said. LNG is heavier than CNG and has more heating value and offers a range of 700-800 km on a full tank, which is the same as a truck running on diesel. These qualities make LNG suitable for heavy-duty engines. Under an International Maritime Organisation, all ships are to switch to LNG from April 2020. India’s largest gas importer Petronet LNG has been talking about converting trucking on the west coast highway connecting Delhi with Trivandrum, covering a total distance of 4,500 km via Mumbai and Bengaluru, for the last two years but without much success.

https://timesofindia.indiatimes.com/city/delhi/delhi-to-lead-indian-trucking-into-gas-age/articleshow/71383303.cms

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Skewed gas rates may upset ONGC’s pricing formula in new block

State-run Oil and Natural Gas Corp. Ltd (ONGC) may be forced to sell natural gas at a discount to its originally expected price from its newest deepwater block in the Krishna-Godavari basin as gas prices remain subdued due to a supply glut internationally,

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three people directly aware of ONGC’s discussions said requesting anonymity. ONGC plans to begin natural gas production from the deepwater block KG-DWN-98/2 in about two to three months and is expected to finalize shortly agreements for the sale of gas from the asset. The company, according to the people cited above, has been in talks since August to assess demand potential from buyers which include Gail India and several city gas distribution companies. “Several buyers who have met ONGC have expressed reservations at buying gas at the upper ceiling, which was initially proposed by ONGC,” said the first person cited above. KG-DWN-98/2 is an ultra-deepwater, high-temperature and high-pressure field and according to a pre-determined pricing formula, ONGC can charge customers up to $8.43 per MMBtu fixed for the second half of this fiscal. This current ceiling price is 9.5% lower than the ceiling price of $9.32 per MMBtu fixed for the first half of this fiscal. Situated 35km off the Andhra Pradesh coast in the Bay of Bengal, the block would cumulatively produce around 25 MMT of oil and 45 BCM of gas with peak production of 78,000 barrels per day of oil and 15 MMSCMD of gas. ONGC expects to bring first gas from this project to market by December-end and oil in 2020. “Given the pricing constraints, ONGC may now price the gas at around $6-7 per MMBtu, factoring in the current LNG spot price plus a markup price,” said the first person cited above. For the second half of this fiscal year, the government has notified a domestic gas price of $3.23 per MMBtu, a decline of 12.5% from $3.69 per MMBtu applicable in the fiscal first half.

This is expected to dampen the profitability of the gas producers, rating agency Icra said in a note on 1 October. The decline in domestic gas price is in line with the decline in global gas indices primarily Henry Hub over the fiscal first half. Also, with prices of gas at various international hubs remaining low, domestic gas prices are expected to remain depressed. Lower gas prices at international hubs has been further accentuated by the commissioning of new gas liquefaction capacities with about 35 MMT coming online in 2018 and another about 30 MMT expected to come online in 2019. Moreover, shale gas production continues to be healthy in the US. Accordingly, Asian spot LNG prices which remained at $9-11 per MMBtu during the winters of 2018-2019 have already declined to $5-6 per MMBtu. For ONGC, a gas price lower than the ceiling of $8.43 per MMBtu would mean it has to take a hit on its profitability as buyers may prefer lifting gas from the spot market at $4-5 per MMBtu. “Even if ONGC gets buyers at $7 per MMBtu, it will be a decent price for the company. More than that, it will be a case of opportunity lost for ONGC,” said one of the three persons mentioned above.

https://www.livemint.com/companies/news/skewed-gas-rates-may-upset-ongc-s-pricing-formula-in-new-block-11570987751554.html

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Delhi to get BS6-compliant vehicles in Apr 2020: Javadekar

Minister of Environment, Forest and Climate Change Prakash Javadekar on Monday announced that BS6-compliant vehicles will be coming in Delhi in April 2020, which will help reduce air pollution.

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Addressing the media on various issues related to environment, Mr Javadekar said, ‘Since 2006, air quality in Delhi has been deteriorating rapidly. But till 2014, neither it was talked about nor much was done to improve it. In 2015, Prime Minister Narendra Modi started Air Quality Index (AQI) which gives minute by minute data of air quality. 113 AQI monitoring stations are present in Delhi/NCR and 29 more to be installed soon.’ ‘BS6-compliant vehicles will be coming in Delhi in April 2020. BS6 petrol/diesel is already available in Delhi/NCR. It will lead to great reduction in air pollution from vehicles,’ he said. ‘Recognition of the existence of a problem is the beginning of the solution of a problem. Mr Modi launched AQI for India – that is first recognition of a problem,’ says the Environment Minister. The Minister said Delhi has one of the best metro networks of the country due to which over four lakh motor vehicles are off the roads, thereby reducing pollution. ‘Delhi Metro has significantly reduced the number of motors on the road,’ he said. The Minister also advised people to avoid bursting crackers in the festive season as it pollutes the air. ‘I will advise against bursting firecrackers, and am confident that children themselves will ask parents to not buy firecrackers, but if someone wants to then buy green firecrackers, its a historic initiative of Dr Harsh Vardhan,’ he said. ‘As many as 200 MoUs for green fire crackers have been signed by Dr Vardhan,’ he said. On the Aarey Forest protest, the Minister said, ‘I will not comment on the matter as the matter was in Supreme Court and it has said what it had to.’ On the issue of stubble burning in Northern India, the Minister added, ‘We are trying to reduce stubble burning. We will be meeting state governments next week.’ Delhi’s air quality had deteriorated to the ‘moderate’ category with an AQI reading of 141.

http://www.uniindia.com/delhi-to-get-bs6-compliant-vehicles-in-apr-2020-javadekar/india/news/1751800.html

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LNG Development and Shipping

ExxonMobil India LNG signs MoU with IOCL

ExxonMobil India LNG Limited, an affiliate of ExxonMobil, has signed a Memorandum of Understanding with Indian Oil Corporation Ltd. (IndianOil), to expanding its liquefied natural gas (LNG) business initiatives in the country.

 

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“The companies together will focus on exploring new models of delivering cost-effective natural gas in India where it is most needed to complement traditional pipelines,” said ExxonMobil in a press statement.

“What really matters is how we accelerate India’s access to affordable, cleaner energy,” said Bill Davis, Lead Country Manager, South Asia, ExxonMobil. “We see great potential here, and are delighted to join forces with IndianOil to unlock lasting value for India,” he added. IndianOil is India’s largest state-owned downstream petroleum company by earnings. Its core businesses are refining, transportation, and marketing of petroleum products. Over the years, IndianOil has not only expanded in the downstream gas marketing in India but also ventured into petrochemicals. ExxonMobil has been delivering natural gas to India for nearly two decades, it said. Gas currently accounts for just under 6% of energy demand in India. The government plans to increase this share to 15% by 2030. According to Wood Mackenzie forecast, LNG demand will double from some 37 BCM in 2018 to reach 75 BCM by 2030, equivalent to 7% of the energy mix. LNG will meet approximately 50% of this demand growth, providing a major growth opportunity for Total.

Source: LNG Global

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11 months on, Mundra LNG terminal awaits commissioning

The Gujarat government-backed liquefied natural gas (LNG) project at Mundra, built at an estimated cost of Rs 5,000 crore, is yet to be commissioned.

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This is nearly eleven months after it was inaugurated by Prime Minister Narendra Modi. The government set up a special purpose vehicle, GSPC LNG Ltd, to execute the LNG project in Kutch with a capacity to re-gasify 5 MMTPA. The terminal’s capacity can be expanded to 10 MMTPA and it will have a berth for receiving LNG (liquefied natural gas) tankers and storage tanks for re-gasification and evacuation. The government set up several committees to examine issues posing hurdles to the project and find solutions. “We hope to resolve the issues soon, one way or the other,” said a government official. One of the main reasons cited for the delay is that certain lease and sub-concession agreements between the promoters and Gujarat government are yet to be signed, government sources said. A commissioning cargo from US had arrived at the Mundra LNG terminal last November, but it had to be diverted to Hazira after it was not allowed to discharge its at Mundra, sources said. Gujarat government owns about 50% in GSPC LNG and 25% is owned by Adani Group. The government has been looking to induct a third partner for many years now. In May, Gujarat Maritime Board invested Rs 500 crore in GSPC LNG, picking up about 40% equity in the process. The remaining 10% is held jointly by Gujarat State Petroleum Corp and its group companies, sources said. Indian Oil had earlier announced plans to pick up 50% equity in the project for which it got in-principle approval from its board in August 2017. IOCL, which carried out due diligence on the project, eventually dropped its plans. The LNG terminal project was conceived back in 2008 by the Gujarat government.

Source: indiatimes

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Demand concerns loom over India’s liquefied natural gas expansion spree

Prime Minister Narendra Modi’s recent visit to the United States was marked by a $2.5-billion long-term liquefied natural gas (LNG) deal. Though the government expects a surge in LNG demand, industry players are sceptic of natural gas use in India’s energy basket.

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Gas pipeline capacity utilisation is still as low as around 40 per cent while the existing LNG terminals running at 58 per cent capacity. India has drawn a roadmap to double its regasification capacity from 37.5 MMTPA to 74 MMTPA in the next 10 years at an investment of around Rs 30,000 crore, excluding the cost of jetty and pipelines. “Lower capacity utilisation of below 10% in Kochi and Dhabol has brought down the overall average. There are plans to double the capacity but the major concern is on demand side. If we have to maintain the current level of capacity utilisation, demand from power sector should materialise,” said a senior government official. At present, India has five terminals including, Dahej, Hazira, Dabhol, Kochi, and Ennore.

While Petronet LNG’s Dahej terminal has crossed 100 per cent capacity utilisation in some months, Royal Dutch Shell’s Hazira is running at around 95%. “Given the demand growth in natural gas in India, the RLNG demand is expected to be around 30-35 MMTPA in the next 10 years. If you look at a steady situation, globally, LNG terminal capacity utilisation is around 50-55 per cent. In that scenario, going by the global average, for a demand of around 35 MMTPA, we will be looking at a capacity of over 70 MMTPA,” said Anirban Mukherjee, partner and director, Boston Consulting Group (BCG). Mukherjee added this demand may further increase if the power sector too comes. As per estimates, investments to the tune of around Rs 3,000-4,000 crore is required to build a 5 MMTPA Floating Storage Regasification Unit (FSRU). In an effort to revive 25,000 mega watt (Mw) of stressed gas-based power plants, the ministry of petroleum and natural gas along with the ministry of power is working on an e-RLNG scheme. Based on this, pooled domestic and LNG gas may be auctioned to power sector, while power tariffs will be subsidised. Though a similar scheme was launched in 2015, it was later discontinued. According to industry experts, these gas-based power plants will become competitive at a spot price of $5 per MMBtu  adjusting landing and transportation too. However, India’s ability to source at that price on continuous basis will be critical for the power sector. During 2018-19, India imported 21.7 mt LNG, around 46.4 per cent of the total gas consumption in the country. During the April to August 2019, this has increased to 51 per cent at around 10.18 mt. According to the government estimates, a major swing in gas consumption in India is set to come from city gas distribution sector, because of which the LNG consumption may increase from 73 million metric standard cubic meter per day (mmscmd) to around 227 mmscmd by 2025. After the completion of the ninth and tenth round of CGD bidding, natural gas is expected to reach around 70 per cent of the country’s population. “Swing here is not CGD. It is a good addition. For demand increase to materialise, power sector demand too has to come in,” Mukherjee added.

https://www.business-standard.com/article/economy-policy/demand-concerns-loom-over-india-s-liquefied-natural-gas-expansion-spree-119101300783_1.html

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INTERNATIONAL NEWS

 

Natural Gas / Transnational Pipelines/ Others

Iran discovers natural gas field in Fars province

Iran said Sunday it discovered a natural gas deposit in the southern province of Fars, holding as much as 19 trillion cubic feet of the fuel. The reservoir called Eram also holds as much as 385 million barrels of condensates,

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Reza Dehghan, director of development and engineering affairs at the National Iranian Oil Company, told reporters at the oil ministry in Tehran. Drilling took nine months and started last year, he said. The value of the resource could be as much as $40 billion, he said. Iran shares ownership of the world’s largest natural gas deposit, South Pars and North Field in the Persian Gulf, with Qatar. While the field has helped Qatar to become the world’s largest liquid natural gas exporter, Iran has mostly used its part of the field for domestic uses. The development of the Eram gas field will start in two or three years, Dehghan said. Once production starts, the gas will be used for domestic consumption as well as for Eram itself to prevent a decline in pressure.

https://www.hellenicshippingnews.com/iran-discovers-natural-gas-field-in-fars-province/

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U.S. natural gas output, demand seen rising to record highs in 2019

U.S. dry natural gas production will rise to an all-time high of 91.63 billion cubic feet per day (bcfd) in 2019 from a record high of 83.39 bcfd last year, the EIA said in its Short Term Energy Outlook (STEO) on Tuesday (Oct 2).

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The latest output projection for 2019 was up from EIA’s 91.39 bcfd forecast in September. EIA also projected U.S. gas consumption would rise to an all-time high of 84.25 bcfd in 2019 from a record 81.86 bcfd a year ago. The 2019 demand projection in the October STEO report was down from EIA’s 84.51 bcfd forecast for the year in September. EIA projected output in 2020 would rise to 93.50 bcfd, and demand would rise to 84.96 bcfd. The agency forecast U.S. net gas exports would reach 4.6 bcfd in 2019 and 7.2 bcfd in 2020, up from 2.0 bcfd in 2018. The United States became a net gas exporter in 2017 for the first time in 60 years. The EIA projected gas would remain the primary U.S. power plant fuel in 2019 and 2020 after supplanting coal in 2016. It projected the share of gas generation would rise to 37% in 2019 and 2020 from 34% in 2018. Coal’s share of generation was forecast to slide to 25% in 2019 and 22% in 2020 from 28% in 2018. Nuclear’s share of generation was expected to hold around 20% in 2019 and 2020, while renewables will rise from 17% in 2018 to 18% in 2019 and 19% in 2020.The EIA projected the power sector would burn 545.8 million short tons of coal in 2019, the lowest since 1979, and 496.0 MMT in 2020, the lowest since 1978. That compares with 636.5 MMT in 2018, the lowest since 1983. U.S. carbon emissions have mostly declined since peaking at 6,004 MMT in 2007 as the power sector burns less coal, falling to a 25-year low of 5,131 MMT in 2017. But in 2018, energy-related carbon emissions rose for the first time in four years to 5,269 MMT due to a booming economy and higher gas consumption during a colder winter and warmer summer. The EIA projected carbon emissions would slip to 5,142 MMT in 2019 and 5,054 MMT in 2020, the lowest since 1991, as more coal plants retire.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/u-s-natural-gas-output-demand-seen-rising-to-record-highs-in-2019/71497596

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Europe’s gas demand soars as Dutch giant folds

Europe’s energy landscape will be completely changed once the Dutch shut down the largest gas field on the continent years ahead of schedule, according to Rystad Energy. The Netherlands recently

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announced that production at Groningen – Europe’s largest gas field – will be halted in 2022, eight years earlier than initially planned. However, despite the ambitious target of decommissioning the field by 2022, Rystad Energy expects that there could be some residual production from Groningen up to 2030 as it is technically challenging to completely shut down production in such a short timeframe. The drastic drop in output from Groningen will redefine the European energy landscape. The field, which had a rebound in production at the start of this century, reaching 57 BCM in 2013, was for decades the central cog in northwest Europe’s gas system. “The phase-out of this giant field will force Europe to expand its gas imports at an even quicker pace. We can already see this drastic shift taking place in the Netherlands, which is in the midst of the transition from being a net gas exporter to a net importer,” says Carlos Torres-Diaz, head of gas markets research at Rystad Energy. In Europe, more supply from alternative sources will be needed as domestic production declines and demand continues to increase. The continent has ambitious plans to decommission coal and nuclear power generation, and this could lead to higher gas demand, especially in the medium term. Renewable energy sources should replace some of the lost power capacity, but due to the low capacity factors of these technologies and their intermittency, the power system will rely strongly on gas power to provide security of supply. Consequently, Rystad Energy forecasts that gas-for-power demand in Europe will continue to increase until 2025 and then gradually decrease as renewables gain momentum. The Netherlands has formally set an ambitious goal that 83% of total power generation is to be sourced from solar and wind by 2040. Such a transition to renewables means that the need for gas-power could reach a peak in 2020 and start a gradual decline earlier than in the rest of Europe. This will lead to a 32% drop in total gas demand in the country over the next two decades, from around 37 BCM in 2019 to 25 BCM by 2040.  “More pipeline and LNG imports will be needed in the Netherlands to replace declining production from Groningen. Dutch exports to neighboring countries are also expected to drop making the whole region more dependent on LNG imports to meet its demand,” Torres-Diaz added. Rystad Energy expects the global market for LNG to remain oversupplied over the next two years and then tighten after 2023. “We remain optimistic about the potential for global growth in demand driven by Asia in the long term and forecast total LNG demand to reach 604 MMTPA by 2030. That means 175 MMTPA of new supply is needed to meet demand by 2030,” Torres-Diaz remarked. Turning to the global market for natural gas, Rystad Energy forecasts global supply will reach 4660 BCM by 2030. The additions are driven by North America, the Middle East and Russia. “Since our last forecast in June 2019, we have increased our base supply outlook by around 50 BCM for 2030, driven by increased supply potential from the US and Russia” Torres-Diaz said. Traditional gas suppliers, such as Indonesia, Norway and the Netherlands, are facing production declines due to maturing fields and the production cap at Groningen in the Netherlands.

https://oilprice.com/Energy/Natural-Gas/Europes-Gas-Demand-Soars-As-Dutch-Giant-Folds.html

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Israel to increase gas exports to Egypt, companies say

Israel is significantly increasing the amount of natural gas it plans to export to Egypt under a landmark deal, Israeli energy companies said on Wednesday (Oct. 2), sending their shares higher.

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Partners in Israel’s Leviathan and Tamar offshore gas fields agreed last year to sell $15 billion worth of gas to a customer in Egypt in what Israeli officials called the most significant deal to emerge since the neighbors made peace in 1979. The amended agreement sees a 34% increase in exports to about 85 BCM. One source in the Israeli energy industry estimated the value of gas was now $19.5 billion – $14 billion coming from Leviathan and $5.5 billion from Tamar. Texas-based Noble Energy, Israel’s Delek Drilling and Ratio Oil own Leviathan. Noble, Delek Drilling, Isramco and Tamar Petroleum are leading partners in the Tamar field. In a joint statement the Israeli companies said the amount to be sold from the Leviathan field will nearly double to 60 bcm of gas over 15 years. Exports from the nearby Tamar field will be reduced to 25.3 BCM from 32 BCM over the same period.

The customer in Egypt is a private firm, Dolphinus Holdings, that according to the original agreement plans to supply large industrial and commercial consumers in Egypt. Under the amended deal, supplies will begin on Jan. 1 and continue through 2034. The companies will sell 2.1 BCM a year, which will grow to 6.7 BCM annually from the third year on. The companies had initially hoped commercial exports would begin in 2019. “This transaction will open the door for further investments in the regional energy market, providing cheaper and cleaner energy to the citizens of the region,” Delek Drilling CEO Yossi Abu said. The Tel Aviv Stock Exchange’s oil and gas index was up 4.8%. Delek Drilling shares rose 8.7%, Ratio was up 9.5%, and Tamar Petroleum was 10% higher. Barclays analyst Tavy Rosner said the announcement was “another sign of Israeli gas attractiveness”, adding he saw a potential upside of 23.8% to 87% in the share prices of local exploration and production companies, depending on the share. Noble and Delek Drilling have also partnered Egyptian East Gas Co in a venture called EMED, which agreed around a year ago to buy into the subsea EMG pipeline that will carry the gas.

Source: LNG Global/Reuters

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Brazil’s natural gas demand jumps 12.8%, LNG regasification 36% in July

The total demand for natural gas in Brazil jumped 12.8% on the month to 75.8 million cu m/d in July, according to the most recent Brazil’s Ministry of Mines and Energy’s report.

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The average import of Bolivian gas in July remained stable at 12.99 million cu m/d. However, the regasification level of LNG increased 36% month on month to 12.41 million cu m/d in July. The higher LNG imports were due to lower global LNG prices during the period, which according to the report reached the second lowest imported price of the year in the country. Even though the average price of imported LNG by Brazil increased to $5/MMBtu in July from $4.6/MMBtu in June, the report showed, the price was competitive given the fact the gas imported from Bolivia averaged $5-$6/MMBtu, according to multiple market participants. Meanwhile, Brazil’s domestic supply accounted for a 6.7 million cu m/d increase month on month, totaling 56.85 million cu m/d of gas in July, a 13% increase from June. So far in 2019, 69% of the total natural gas offered in the Brazilian market was domestically produced, the report showed.

https://www.hellenicshippingnews.com/brazils-natural-gas-demand-jumps-12-8-lng-regasification-36-in-july/

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‘Nigeria’s proven gas reserves to last for 67 years’

They noted that as at the end of 2018, Nigeria’s total proven gas reserves were 202trillion cubic feet (TCF), 37.26% of the total African deposits, saying with these reserves, Nigeria is second to none in

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Africa and 9th in the world. They disclosed that the potential is even more, with 600TCF in unproven reserves. In the one year period between June 2018 and June 2019, gas production printed at 3.04TCF. This amounts to a reserve: production ratio of 66.5 – implying consistent production for at least 66.5 more years. However with growing Liquefied Petroleum Gas (LPG) adoption and with the Nigeria Liquefied Natural Gas (NLNG) set to finally increase production by an additional 8MMTPA (from 21.6MMTPA currently), there is a need to intensify the find for new gas reserves. In August, there was some breakthrough for efforts, as the NNPC/NAOC/Oando JV announced a significant gas and condensate find in the deeper sequences of the Obiafu-Obrikom fields, in OML61, onshore Niger Delta. This discovery amounts to 1TCF of gas and 60 million barrels of associated condensate, and brings Nigeria’s total proven gas reserves to c. 203TCF. Meristem, however, said that more relevant than the accumulation of gas reserves is their commercialisation. According to them, there is a necessity to invest in the requisite infrastructure to capture and process the gas into Liquefied Natural Gas (LNG), Liquefied Petroleum Gas (LPG) or Compressed Natural Gas (CNG) for domestic consumption and the export market or for use as feedstock for powering gas plants. Meanwhile, as at 2018, Nigeria had 7.3 per cent of the global LNG export market, with annual export of 21.3MMTPA. By this month, NLNG is expected to take Final Investment Decision (FID) on the Train-7 project which has been in the pipeline for years. The project is worth an additional 8MMTPA and will rank Nigeria third largest LNG export country in the world on completion. This came as it has been disclosed that other local players and International Oil Companies (IOCs) are also ramping up their efforts at gas commercialisation. Shell and the SEPLAT/NPDC joint venture are pushing through with the Assa North/Ohaji South (ANOH) Gas Processing Company’s project. The project recently reached FID and requires c. $700 million in financing. Quite importantly, critical transportation infrastructure for export such as the 614km Ajaokuta-Kano-Kaduna Pipeline would be required to complete the value chain and achieve the earning potential of these reserves. As it were, competition in the global LNG export intensifying rapidly, with the US and Australia leading the charge, Meristem analysts said.

https://www.newtelegraphng.com/2019/10/nigerias-proven-gas-reserves-to-last-for-67-years/

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Global LNG Development

Is this the next natural gas super alliance?

Saudi oil giant Aramco could invest in liquefied natural gas (LNG) projects in Russia in the future, Russian Energy Minister Alexander Novak said at a Saudi-Russian investment forum in Riyadh on Monday (Oct 14).

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“Now we have invited our Saudi colleagues to develop our projects for the production of liquefied natural gas in the north of Russia, we have a successful Yamal LNG project. We believe that Saudi Aramco will be one of the investors in future projects,” Novak said, as carried by Russia’s news agency TASS. The Russian energy minister was attending the forum which is part of a landmark visit of Russia’s President Vladimir Putin to Saudi Arabia. Putin is holding talks on Monday with Saudi King Salman bin Abdulaziz Al Saud, with whom he is discussing cooperation to stabilize the price of oil, economy, trade, and investments. Putin is also holding today a separate meeting with Saudi Crown Prince Mohammed bin Salman. Over the past few years, the meetings between Putin and the crown prince at various international events have served as a kind of pre-approval of the next moves of the OPEC+ coalition. Speaking at the Saudi-Russian forum today, Novak said that thanks to the cooperation between Saudi Arabia and Russia, and by extension between OPEC and the non-OPEC producers part of the pact, the parties will manage to keep a long-term stability on the oil market. In the LNG sector, Russian companies plan to build more projects in the future, and these could be the target of Saudi investments. Russia’s largest independent natural gas producer, Novatek, expects its recently added gas field licenses to provide enough gas to warrant the construction of a third large LNG plant, its CEO Leonid Mikhelson said last month. Novatek, which already exports LNG from the Yamal LNG plant, has just given the go-ahead to its second large LNG project, Arctic LNG 2 on the Gydan Peninsula.

By Tsvetana Paraskova for Oilprice.com

https://oilprice.com/Latest-Energy-News/World-News/Is-This-The-Next-Natural-Gas-Super-Alliance.html

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Europe’s natural gas glut turns LNG tankers toward Asia

With Europe’s natural gas consumption damped by mild weather, some tankers are turning away in search of new markets because there’s not enough room to park the fuel while traders await higher prices.

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Multiple liquefied natural gas cargoes that were due to arrive in the region have been canceled due to a lack of space in storage terminals, according to traders familiar with the situation. That means some gas sellers won’t be able to benefit from the usual seasonal price increase and instead must seek other customers, which may be a boon for buyers in Asia.

At least seven tankers that loaded over the past two months, mainly in the U.S., have diverted away from Europe, according to cargo-tracking company Kpler. Temperatures so far this month have been more mild than normal, reducing heating demand. “It makes sense to divert” given the premium LNG can earn in Asia over European prices, said Jean-Christian Heintz, head of LNG broking at SCB Brokers SA in Nyon, Switzerland. “Probably there is a bit of speculating on a potential spike in December in Japan. By the time the spike arrives, if you have your ship in front of a European terminal, it is going to be too late.”

The latest example is the Maran Gas Hector, which was due to arrive in Belgium on Oct. 5 from the U.S. Gulf. Earlier in the week, it made a U-turn in the middle of the Atlantic Ocean before turning back again toward Europe, on a likely course for the Mediterranean Sea. Near Rotterdam, home to one the region’s LNG import terminals, a fourth tanker with LNG on board appears to be idling and used as floating storage, ship-tracking data on Bloomberg show. GasLog Sydney, which loaded a Yamal LNG cargo via a trans-shipment on Oct. 1, hasn’t indicated any further destination, joining three other vessels full of LNG floating in the area. Spanish LNG facilities in particular have received a record numbers of cargoes recently as traders took advantage of the nation’s six terminals, the most in any European nation. They poured gas into the tanks when prices were low and supply was booming from new plants in the U.S. The aim was to take advantage of higher prices months later when the heating season kicked in. They also knew they could find a home for their cargoes there.

Now, the Spanish terminals are so full that only scheduled shipments will be serviced and no longer available opportunistic shippers looking for storage capacity, according to people with direct knowledge of the information.

Source: LNG Global/Bloomberg

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Australia’s battle with Qatar for LNG crown stretching to 2020

Australia will likely overtake Qatar as the world’s largest LNG exporter in 2020, according to an Australian government report, one year later than it had previously forecast.

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“The narrow difference between the projected exports of the two nations means that Australia overtaking Qatar is far from certain, especially in 2019,” the Department of Industry, Innovation and Science said in its report released Monday (Sept. 30). The two nations, along with the U.S., will be the top producers next decade of LNG, the fastest growing fossil fuel that’s finding users across developing economies and Asia, particularly China. Australia’s LNG exports are expected to rise to 81 MMT in 2020, while Qatar’s hold steady at around 76 MMT, close to levels forecast for this year for the Persian Gulf state, according to the report. Even if Australia does take the top spot, it’s not expected to hold it for long. New projects in the U.S. and expansions in Qatar mean Australia will likely be surpassed again by both nations in the middle of next decade, it said.

Australia’s LNG export earnings are seen peaking at A$52 billion ($35 billion) in 2019-20 as the recent wave of new projects, including Royal Dutch Shell Plc’s Prelude and Inpex Corp.’s Ichthys, ramp up to full production, before easing to A$49 billion in 2020-21.Spot LNG prices over the forecast period are expected to recover modestly from current lows. Prices are seen averaging $5.40 per million British thermal unit in 2019 and $6.30 in 2020.The pace of the price recovery is expected to accelerate from 2021 as Australia, Russia and U.S. capacity additions are completed, while growing demand begins to narrow the global surplus.

Source: LNG Global/Bloomberg

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Thailand’s Gulf Energy and PTT to build $1.33 bln LNG project with the government

Thailand’s Gulf Energy Development Pcl and state-owned PTT Pcl will build a 40.9 billion baht ($1.3 billion) gas terminal and port on the country’s east coast, the Industrial Estate Authority of Thailand (IEAT) said on Tuesday.

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The government says its investment partnership with the Gulf MPT LNG Terminal Company Limited – a joint venture between a subsidiary of Gulf Energy with a 70% stake and a unit of PTT with a 30% stake – will bring more investment to the industrial east and boost economic growth. Commercial operation of the project is scheduled to start by 2025. The project will include the design and construction of the port and a liquefied natural gas terminal that will have an annual capacity of at least 5 million metric tons per year in the first phase and up to 10.8 million tons per year at a later stage, Gulf Energy said on Tuesday. The project is “one of five mega infrastructure projects of the Eastern Economic Corridor,” and will help create a “seamless transportation network” between Thailand and neighbouring countries, Deputy Prime Minister Somkid Jatusripitak said. Other mega infrastructure projects include a high-speed train linking two of Bangkok’s international airports with U-Tapao airport in eastern Thailand; the expansion of U-Tapao airport; and the expansion of the Lam Chabang deep sea port. Thailand’s industrial east is already home to foreign auto manufacturers such as Toyota, Honda and Ford and also houses petrochemical and electronic companies.

Source: LNG Global

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Exxon to make $500 million initial investment in Mozambique LNG project

Exxon Mobil plans to invest more than $500 million in the initial construction phase of its liquefied natural gas (LNG) project in Mozambique. The U.S. oil company’s $30 billion Rovuma LNG project,

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jointly operated with Italy’s Eni, has a capacity of more than 15 MMTPA and is set pump much-needed cash into the southern African nation’s ailing economy. “The Area 4 partners will advance midstream and upstream area project activities of more than $500 million as initial investments,” Exxon head of power and gas marketing Peter Clarke told a ceremony in Mozambique’s capital Maputo on Tuesday (Oct.2). Construction of onshore facilities has been awarded to a consortium led by Japan’s JGC, U.K firm TechnipFMC and U.S. company Fluor Corp. “These EPC (engineering, procurement and construction) contracts cover the construction of two natural gas production trains with a total capacity of 15.2 MMTPA, as well as associated onshore facilities,” Clarke said. Final investment decisions, a term used by the oil industry to mean the commercial and regulatory aspects of a project are finalised, would be made in 2020, Clarke said. Mozambique, among the poorest countries in the world, holds presidential elections on Oct. 15, and the investments stand to boost President Filipe Nyusi’s popularity and ease growing frustrations over unemployment and poverty. The Exxon project, along with Total’s $20 billion 13 MMTPA facility and Eni’s $8 billion 3.4 MMTPA floating plant, mean Mozambique will have the ability to export 31 MMTPA of natural gas, about 10% of today’s global market. South Africa’s Standard Bank said in a March report revenue from the gas investments could lift annual economic growth past 5% and household per capita income by 50% over the 2018 average.

Source: LNG Global/Reuters

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Azerbaijan offers LNG supply on long term basis to Pakistan

Azerbaijan on Tuesday (Oct. 8) offered Pakistan to supply Liquefied Natural Gas (LNG) on the long term basis and expressed interest in infrastructure development of the commodity especially oil and gas exploration activities.

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A delegation of Azerbaijan, led by Ambassador Ali Alizada, expressed the keenness during a meeting with Minister for Petroleum Omar Ayub Khan here. Country head state-owned State Oil Company of Azerbaijan Republic (SOCAR), Azerbaijan’s largest oil and gas company operating in many countries, accompanied the ambassador. The visiting delegation showed keen interest in exploring business and investment opportunities in Pakistan’s energy sector. Pakistan has developed as an important LNG market in recent years that has attracted interest from various investors. The envoy said Azerbaijan and Pakistan were enjoying cordial relations, adding his country wanted to boost economic ties specially in the energy sector of Pakistan. Minister for Petroleum Omar Ayub Khan appreciated the warm words expressed by the ambassador. “Our government has an open door policy for business and investors. The government has taken important steps towards reducing cost of business in the country which has led to ease of doing business in the country. Pakistan believes in an open and competitive market and transparency,” he apprised the envoy. The minister asked the Azerbaijan side to explore investment opportunities in “gas distribution, exploration and renewable energy which we plan to take to 60% of our energy mix in the future.” He also offered Azerbaijan access to the Gwadar deep seaport, an ultimate destination of China Pakistan Economic Corridor. The ambassador apprised the minister of his government’s decision to award him a diplomatic medal in recognition of his kind service to further strengthen relations between both the brotherly countries. The two sides exchanged souvenirs and a vote of thanks with an understanding to continue holding meetings and discussions in the future.

https://www.hellenicshippingnews.com/azerbaijan-offers-lng-supply-on-long-term-basis-to-pakistan/

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Supply surge and easing China growth kill LNG’s seasonal swings: Russell

Liquefied natural gas (LNG) won’t enjoy its customary winter boost in Asia this year, and the seasonal swings in prices may well be a thing of the past as new supply and a steadier China demand profile dampen volatility.

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The forward curve for LNG futures isn’t quite as flat as a pancake, but it certainly suggests that the northern winter price spike seen in seven of the last eight northern winters will be absent this year. Chicago Mercantile Exchange contracts based on the Asian benchmark spot price, the Japan/Korea Marker compiled by S&P Global Platts, show a winter price peak of $7.02 per MMBtu for February cargoes, as of the close of trade on Wednesday (Oct. 2). This compares to $5.71 per MMBtu for the front-month November contract, $6.45 for December, and $6.98 for January. After the February peak implied by the futures, prices moderate again, with the March contract at $6.70 per MMBtu, April at $6.12 and May at $5.99. The modest uptick in expected prices for the northern winter stands in contrast to prior years, when Asian spot prices LNG-AS have surged during the colder period. For example, in the winter of 2017/18, the spot price more than doubled from a low of $5.40 per MMBtu in June 2017 to a peak of $11.50 in January 2018. However, the increasing supply from new LNG trains in Australia and the United States started to alter that dynamic in 2018/19, with the spot price peaking in June that year amid summer power demand, with only a minor lift ahead of winter and a seasonal peak in November. The last of eight new LNG projects built over the past decade in Australia has started, making it the world’s top exporter, overtaking Qatar. The United States has also been ramping up output, with three new plants starting this year and several expected to start operations later this year or early in 2020. The other major factor has been both a slowing and a smoothing of growth in LNG in China, which in 2018 overtook South Korea as the second-biggest importer of the super-chilled fuel, behind Japan. China imported 42.9 MMT of LNG in the first nine months of the year, according to vessel-tracking and port data compiled by Refinitiv. Assuming this pace is maintained for the rest of the year, China will import a total of about 57.2 MMT for 2019. This would actually be a modest 6.3% gain on the 53.8 MMT imported for the whole of 2018, although there is a possibility that imports of the fuel increase in the last quarter to meet winter demand. However, even with a strong fourth quarter, it seems China’s LNG demand growth will be considerably lower in 2019 than it was in 2017, when it jumped 48% on the year, and in 2018, when it increased by 41%. However, it is worth noting that LNG imports were exceptionally strong in the November to January period in 2018/19, setting three consecutive monthly records. The question for the LNG market is whether China is likely to once again experience a surge in demand in the winter months, or whether the relatively stable monthly volumes of imports since the January peak will continue over the coming winter. Certainly, it appears that Beijing’s campaign for better air quality will continue this winter, and further coal-to-natural gas switching in residential heating and industry is likely. But it also appears China is managing its natural gas supply and demand better, with new storage available to smooth out seasonality, as well as increased domestic output. This increases the risk there will not be a seasonal lift in the demand in China, meaning that spot prices are likely to struggle to reach even the modest gains implied by the CME forward curve.

Source: LNG Global (Editing by Clarence Fernandez)

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Natural Gas/LNG Utilization

CNG will support carbon emission reduction strategy in Southwest U.S.

Certarus Ltd. has entered into a two year CNG supply agreement with a leading Large Scale Independent Permian Energy Company to support its strategy to reduce environmental impacts, including carbon emissions in the Permian Basin.

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Certarus has now entered into three major contracts this year in the Permian Basin as energy companies actively secure an uninterrupted supply of clean burning CNG to support their operations. Through this contract, the energy company will displace the use of diesel fuel across its entire suite of operations with locally sourced CNG produced from its regional midstream network.  In addition to reducing carbon and other air emissions, the contract will deliver fuel cost savings to the energy company and result in lower overall mileage exposure associated with fuel transportation. This more effective utilization of natural gas in the Permian Basin will also contribute to reducing the amount of gas that would otherwise be flared in the region. Under the agreement, Certarus will displace a minimum of 27,000,000 gallons of diesel fuel with CNG, with the option for the energy company to expand up to 60,000,000 gallons during the term. Certarus expects to commence CNG supply immediately. “Through our market-leading North American platform, Certarus provides solutions to industrial and other large volume customers to lower both their carbon emissions and costs.  Our customers are appreciative of being able to immediately realize on this environmental and economic win-win as we all work towards a more sustainable future,” said Nathan Ough, Vice President of Certarus. Energy companies across North America are increasing their use of dual fuel or electric applications to achieve reduced environmental impacts and lower costs. Through the use of natural gas in place of other more emission-intensive fuels, Certarus provides a supply of clean, cost effective energy to help support corporate Environmental, Social and Governance (ESG) best practices.

http://www.ngvjournal.com/s1-news/c1-markets/cng-supply-will-support-carbon-emissions-reduction-strategy-in-southwestern-u-s/

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OMV, Snam and TAG join efforts on LNG-powered mobility in Austria

OMV, Snam and TAG have signed a Memorandum of Understanding (MoU) for the collaboration in the field of sustainable LNG mobility. The agreement was signed by Rainer Seele, CEO of OMV Aktiengesellschaft; Marco Alverà, CEO of Snam S.p.A.;

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as well as the Managing Directors of TAG GmbH, Daniele Gamba and Rudolf Starzer. The MoU lays out the intention to jointly explore potential opportunities in the field of sustainable LNG mobility in Austria such as the construction of a small-scale LNG liquefaction plant, the framework for a later LNG supply agreement, and the development of a LNG transport market. “We believe that the demand for LNG on the road will grow. Studies suggest that the number of LNG trucks will increase to 280,000 in Europe by 2030. Less CO2 and particulate emissions as well as less noise add up to environmentally sound goods transport. This is why we should get on with expanding the requisite infrastructure and supply,” said OMV CEO Rainer Seele. “Our cooperation with OMV and our associate TAG is aimed at boosting sustainable natural gas mobility in Austria, building on an already successful experience. Italy has the largest number of both CNG (over 1,300) and LNG (over 50) distributors in Europe, and Snam is investing to further strengthen the network for both cars and trucks. Natural gas is the most immediate solution for reducing pollution from fine dust and CO2 emissions from light and heavy transportation and also has great potential in maritime and rail transport. Additionally, thanks to biomethane and bio-LNG, it is gradually becoming renewable, paving the way for further decarbonisation of transport,” added Snam CEO Marco Alverà.

http://www.ngvjournal.com/s1-news/c4-stations/omv-snam-and-tag-join-efforts-on-lng-powered-mobility-in-austria/

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Natural Resources Canada supports advance of CNG storage technology

The Natural Gas Innovation Fund (NGIF), created by the Canadian Gas Association (CGA), announced an investment of $500,000 towards the development and testing of Westport Fuel Systems’ high performance CNG storage system.

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This is in partnership with the project co-funders and supporters including Natural Resources Canada (NRCan), Ford Motor Company and Linamar Corporation. Westport Fuel Systems’ innovative conformable CNG storage system demonstrates the value proposition of natural gas and renewable natural gas by advancing a technology that can deliver lower transportation emissions in the Canadian truck market. Nationally, 18% of the light-duty vehicles sold in 2018 were full-size pickup trucks including the Ford F-150. The innovation here provides a significant opportunity for the greater use of cleaner, more affordable natural gas in this light-duty transportation market. Their new system delivers greater CNG storage while leveraging today’s existing CNG tank technology that includes a polymer liner with carbon fiber composite overwrap infused with epoxy resin. This revolutionary conformable CNG tank technology will allow greater volumes of CNG to be stored on-board vehicles without encroaching on load or passenger space, thereby improving payload flexibility. “Funding support from the Natural Gas Innovation Fund enables Westport Fuel Systems to develop our new and novel conformable CNG storage technology.  Natural gas engines offer one of the cleanest and most economical options available for pick-up truck customers today. This key investment in conformable CNG storage will further accelerate the deployment of NGVs in the Canadian market,” commented Jim Arthurs, Executive Vice President, Westport Fuel Systems Inc.

“NGIF is excited to support Westport Fuel Systems by investing in the research and development of their latest clean-tech solutions for the natural gas transportation market. This product will offer sustainable growth of natural gas vehicles for the benefit of Canada’s economy and environment,” added John Adams, Managing Director, Natural Gas Innovation Fund.

http://www.ngvjournal.com/s1-news/c5-products/canadian-ministry-of-natural-resources-supports-cng-storage-development/[Edited]

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European Investment Bank allocates 200M euros for green buses in Spain

The European Investment Bank (EIB) has provided almost EUR 200 million to cut the polluting emissions produced by buses in Spain’s largest cities. The EU bank has been providing this financing since 2017

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under the Cleaner Transport Facility, which aims to promote cleaner transport systems. This joint EIB-European Commission financing instrument is enabling cities such as Las Palmas de Gran Canaria, Barcelona, Valencia and Palma de Mallorca to swap their older, more polluting diesel buses for new CNG, hybrid and electric replacements. In concrete terms, in Las Palmas de Gran Canaria this financing program has helped to develop a new BRT system with new dedicated roadways, and to put 17 new environmentally friendly buses on the roads, complete with new stops and stations. In Palma de Mallorca, EIB support is making it possible to replace 180 diesel buses with new CNG alternatives that are also longer to provide an improved service. Barcelona also took part in this program to acquire 254 new, less polluting buses that are safer and more modern. In addition to the almost EUR 200 million in financing provided to date, the EIB has approved the provision or more funds to support clean transport projects in other Spanish cities.

Some of these funds were provided via support from the Investment Plan for Europe, whose guarantee makes it possible for the EIB to provide financing on favorable terms to support investments whose structure or nature means that they contribute to boosting economic growth and employment. These clean transport investments will enable the creation of 1,000 jobs connected to building the new buses for Barcelona, as well as 580 in Valencia and 330 in Palma de Mallorca during the implementation phase. In Las Palmas de Gran Canaria, the EIB-financed project for improving the city’s public transport system helped to create 1,000 jobs during its implementation phase.

http://www.ngvjournal.com/s1-news/c3-vehicles/european-investment-bank-allocates-200m-euros-for-green-buses-in-spain/[Edited]

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U.S. group forms to defend natural gas against anti-fossil fuel measures

A group backed by anonymous donors launched a campaign on Monday to promote the benefits of cheap, abundant natural gas against what it called “radical” proposals like the Green New Deal that would phase out use of the fossil fuel.

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The Empowerment Alliance, or TEA, will fund advertising and research to advocate the use of natural gas, which burns cleaner than coal, in the runup to the U.S. presidential election in November of 2020, Terry Holt, a spokesman for the group, said on Monday (Sept.30). Most of Republican President Donald Trump’s challengers for the White House are pursuing aggressive policies to fight climate change. The nonprofit group would not disclose its donors, saying they prefer to remain anonymous because of fears they will be harassed by environmental activists. The group also declined to comment on its budget. Holt said, however, he expected his group’s budget would be smaller than those of anti-fossil fuel organizations funded by billionaire activists like former New York City Mayor Michael Bloomberg and Democratic presidential hopeful Tom Steyer that advocate for a transition away from gas, oil and coal due to their impact on climate change. TEA’s launch comes as environmentalists and some Democratic presidential candidates have called for urgent measures to reduce the nation’s reliance on natural gas, and move more quickly to renewable resources like solar and wind power . Several U.S. cities and states are also looking into ways of curbing natural gas consumption. The Green New Deal, a nonbinding resolution introduced by two Democrats in the U.S. Congress earlier this year, calls for a 10-year, government-driven effort for the United States to move away from carbon-emitting fossil fuels through investments in clean energy. The resolution has become a political target of Republicans who call the plan radical and too expensive. In its statement, TEA said such a policy would devastate the U.S. economy. Natural gas plants, the group argued, save consumers money and are helping to lower carbon emissions by replacing dirtier coal-fired generators.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/u-s-group-forms-to-defend-natural-gas-against-anti-fossil-fuel-measures/71384287

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New 24/7 public access CNG station opens in British Columbia

Natural gas-powered transportation has a new hub in British Columbia (BC) as the first public access CNG fueling station opened in Kelowna. This station expands the province’s CNG network and

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will help enable fleet operators to easily travel from the Lower Mainland to the Interior without worrying about refueling. “Having fleets adopt natural gas helps the province meet its greenhouse gas (GHG) emissions reduction goals, and improves air quality in the communities in which they operate,” said Sarah Smith, director of NGT, regional LNG and biomethane with FortisBC. “By providing fleet owners and operators incentives to adopt natural gas, we’re reinforcing our position as an active partner and leader in reducing GHG emissions in BC while also reducing costs for our customers.” Also on the site is the fueling station for Environmental 360 Solutions Incorporated (E360S) – a waste-hauling organization who picks up residential curbside garbage and delivers it to the Glenmore Landfill, which is one of the many landfills who provide the organic waste that FortisBC uses to produce renewable natural gas. E360S will fuel its fleet of waste haulers from a dedicated fueling system on site while public access will be available for anyone to use, 24 hours a day. By adopting CNG, E360S will reduce their GHG emissions by 25% each year. This is based on the minimum contracted amount of fuel from the station. “E360S is dedicated to becoming North America’s most trusted environmental company and we are proud to partner with FortisBC to provide the first public access CNG fueling station in this region,” said Danny Ardellini, founder and CEO with E360S. “The fueling station and our Kelowna CNG fleet are statements of our commitment to the environment and to reducing GHG emissions.” The new station also adds tremendous value to the community and is ideally located to fuel medium to large CNG vehicles in the area. This project, also made possible by funding from Natural Resources Canada, is the latest in a series of projects in partnership with the city of Kelowna. “This is an important investment in the city, one that contributes to our economy while also providing transportation companies with an option to lower carbon emissions,” said Kelowna Mayor Colin Basran.

http://www.ngvjournal.com/s1-news/c4-stations/new-24-7-public-access-cng-station-opens-in-british-columbia/

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Los Angeles freight company renews all diesel fleet with near zero NGVs

Total Transportation Services Inc. (TTSI) is replacing its entire diesel trucking fleet with near-zero emission natural gas trucks, which it plans to fuel with carbon negative renewable natural gas.

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The announcement was made in conjunction with the non-profit Coalition for Clean Air (CCA) to raise awareness of the importance of natural and renewable gas trucking to help improve air quality and reduce greenhouse gas emissions (GHG) in the Los Angeles region, especially at the L.A. and Long Beach ports. Southern California Gas Co. (SoCalGas), along with environmental health non-profit BREATHE LA, fueling company Clean Energy, engine manufacturer Cummins Westport, and the California Air Resources Board (CARB) participated in the announcement. 25% of TTSI’s investment in the new trucks was funded through CARB’s California Climate Investments initiative, a statewide program that puts billions of cap-and-trade dollars to work reducing GHG emissions, strengthening the economy and improving public health and the environment—particularly in disadvantaged communities. In any given month, 13,000 to 14,000 trucks call at the Ports of Long Beach and Los Angeles, emitting roughly 2,600 tons per year of smog-causing NOx emissions. In this regard, TTSI’s 40 new near-zero emission heavy-duty CNG trucks reduce this type of emissions by 90%. In addition, when fueled with biomethane, the vehicles will reduce GHG emissions by more than 80%. “Southern California needs to reduce its smog-forming emissions by 45% before 2023 to meet Federal standards,” said Joseph Lyou, President & CEO of Coalition for Clean Air. “Replacing diesel engines with near-zero emission trucks would take us a long way toward meeting Environmental Protection Agency rules and avoiding the loss of federal highway funding.” TTSI’s analysis and testing of the Cummins Westport trucks found they met the company’s busy drayage operation needs. The vehicles will be operated by TTSI’s Heavy Load Transfer, LLC division (Port Drayage).

http://www.ngvjournal.com/s1-news/c3-vehicles/los-angeles-logistics-company-renews-entire-diesel-fleet-with-near-zero-ngvs/

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GO TOP

LNG as a Marine Fuel/Shipping

Small ships are next big thing for this US$150B market

Giant ocean-going tankers built the liquefied natural gas industry into a US$150-billion-a-year business. The next expansion opportunity may come from ships a seventh of the normal size.

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Fifty-five years after the first commercial LNG tanker sailed from Algeria, this segment of the gas industry is pushing into ever more niche markets, upending the economics of energy supply in the process. Its next leap forward will be serving customers whose ports or budgets are too small to handle regular LNG tankers. Known as small-scale LNG, the idea is to make the fuel chilled to minus 160-degrees Celsius (256 Fahrenheit) accessible to factories, trucks, ships and even households. That’s set to spur production capacity growth of 58% over the next five years, more than double the pace of the industry in total. “We are just at the end of the beginning,” said Andrew Pickering, the chief executive officer of Avenir LNG Ltd. a London-based supplier set up less than a year ago to focus on the small end of the business. “Let the established players continue to develop large scale and see how we can connect the two.” The International Gas Union classifies a small-scale LNG vessel as one with capacity under 30,000 cubic meters. That’s about 1/7th of the biggest tankers from Qatar, the worlds’ biggest LNG producer. The traditional ships helped create a global trade in the fuel, building an alternative for utilities and industrial customers to gas that arrives by pipeline. Smaller tankers can help LNG reach a growing number of buyers that only need a fraction of the cargo that a regular tanker can carry. Global small-scale production is about 25 million tons per year. That’s a tiny part of the entire LNG industry, which handled more than 300 million tons last year. Still, the small-scale end of the business may grow six per cent a year, according to the IGU. Pickering expects the sector can also make better use of floating import terminals, which may yield another 100 million tons in the next 10 years. That’s caught the eye of some of the leading LNG producers. Qatar Petroleum and Royal Dutch Shell Plc and others are considering investments on the small-scale side of the industry. OMV AG and the Italian pipeline operator Snam SpA said last month they may build a small-scale liquefaction plant in Austria to meet demand for LNG-powered trucks. Facilities for serving ferries are operating in Norway and gas-burning vessels are entering cruise ship fleets. New Fortress Energy LLC, a venture of billionaire Wes Edens, plans to sell LNG across the Caribbean, Central America and West Africa and is already shipping the fuel to Jamaica. It’s seen benefiting from the “secular natural gas demand story, which is being driven by cheap and abundant” fuel in North America, said Gregory Lewis, an analyst at brokerage BTIG LLC. Avenir, an offshoot of shipper Stolt-Nielsen Ltd., intends to cover everything from ships and import facilities to distribution. It even hired a veteran LNG trader, Milorad Doljanin, as chief operating officer to wring as much value as possible out of supplies. With six vessels and an LNG import terminal in Sardinia under construction, the London-based company is also looking to build in Scotland, the South Pacific and Latin America. Avenir is backed by Golar LNG Ltd. and Hoegh LNG Holdings Ltd., the biggest providers of floating terminals. “Small scale is going to be a huge, huge part of the LNG industry going forward,” Hoegh LNG CEO Sveinung Stohle said at the Oil & Money conference in London on Tuesday. “We are extremely bullish on this.”

One big source of small-scale LNG will be from shipping as stricter regulations by the International Marine Organization on the sulfur content of marine fuel kick in from next year. LNG is one of the alternatives to replace dirtier oil product-based fuels. “Are we too early? We think because of IMO 2020 and because the general awareness that gas is both environmentally better and clearly cheaper than conventional fuels that this is going to take off very quickly,” Avenir’s Pickering said. “So I’d rather be a little bit early to a party than too late.”

Source: LNG Global [Edited]

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Spanish service company renews fleet with Fiat eco-friendly vans

Ezentis Group, a company that operates and maintains telecommunications and energy infrastructures for large multinationals in eight countries, has introduced alternative fuel vehicles with

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CNG propulsion for its operations in Spain, thus following its sustainable fleet renewal policy. The introduction of these vehicles in Ezentis’ fleet represents a new firm step in the company’s commitment to sustainability and environmental protection, since CNG vehicles reduce NOx emissions by 90% and CO2 by 25%, compared to conventional fuels. In addition, natural gas vehicles are allowed to circulate through low-emission areas in cities, as they are labeled with the General Directorate of Traffic’s (DGT) ECO sticker. Additionally, the use of this fuel represents a considerable saving with respect to gasoline and diesel. The delivery of the new vehicles was accompanied by a relevant training of drivers on the refueling process. For the renewal of the fleet, Ezentis had signed earlier this year an agreement with Fiat and LeasePlan Spain, a company specialized in fleet management and mobility. The deal includes the delivery of Fiat Fiorino vehicles, several of them fueled by CNG, adapted to the operation of maintenance and deployment of telecommunications networks, which the company is currently developing in various parts of Spain.

http://www.ngvjournal.com/s1-news/c3-vehicles/spanish-service-company-renews-fleet-with-environmentally-friendly-vehicles/

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Shell QGC ships 500th LNG cargo from Curtis Island

Shell’s QGC business, along with its joint venture partners CNOOC and Tokyo Gas, have shipped the 500th cargo of liquefied natural gas (LNG) from its LNG plant on Curtis Island, Queensland.

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The cargo will be delivered by Gladstone’s namesake vessel, the Gas Log Gladstone, Shell said. Shell’s QGC Vice President East, Tony Nunan said: “The 500th LNG cargo safely completed loading today from our plant on Curtis Island, five years since the first cargo set sail.“It takes commitment and collaboration to safely and efficiently develop, process and supply gas to both domestic and international markets. Everyone involved should be very proud of the work taken to reach this important milestone.“Thanks goes to our Joint Venture Partners CNOOC and Tokyo Gas, who believed in the development of a new local industry via a sizable investment and ongoing support.”Zoe Yujnovich, Chairman Shell Australia said: “Producing 500 cargoes is a significant achievement, not just for Shell’s QGC business, but for the Gladstone community and our contractors and suppliers who work alongside us to safely deliver cleaner energy.
“This milestone shows our commitment to be here for the long-term as a safe and reliable supplier of natural gas,” he added.

https://www.marinelink.com/news/shell-qgc-ships-th-lng-cargo-curtis-471418

 

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U.S. sanctions on COSCO hit LNG tankers in Russia’s Arctic

U.S. sanctions on two units of Chinese shipper COSCO hit the liquefied natural gas (LNG) tanker industry on Monday (Sept. 30) as U.S.-listed Teekay LNG said its shipping joint venture in Russia had been “blocked” because of its ties to COSCO.

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The United States imposed sanctions on COSCO Shipping Tanker (Dalian) Co and subsidiary COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co for allegedly carrying Iranian crude oil. Teekay LNG said on Monday that its 50-50 Yamal LNG Joint Venture had been deemed a “blocked person” under the sanctions because its partner China LNG Shipping (Holding) (CLNG) is 50% owned by COSCO Dalian.

“As a result of CLNG’s 50% interest, the Yamal LNG Joint Venture also currently qualifies as a ‘Blocked Person’ under OFAC rules,” Teekay said, referring to the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). “Teekay Group has not traded and will not trade with Iran and will not act in contravention of any trading sanctions,” Teekay said. The venture owns Arc7-class LNG tankers capable of navigating through Arctic ice, making them key to transporting LNG from Novatek’s Yamal LNG plant in northern Russia. The LNG plant, surrounded by thick ice during the winter, is unique in operating in such harsh conditions. The Arc7 tankers take LNG westward to Europe in winter and eastward to Asia in summer when ice along the Northern Sea Route dissipates sufficiently to allow passage. Its Yamal LNG project “has all the necessary capabilities to ensure the delivery of produced LNG to buyers within the agreed by contracts schedules,” Novatek said in a statement. Teekay said it was working with its partners to resolve the issue.

Source: LNG Global [Edited]

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Nakilat signs agreement for full ownership of four Q-Flex liquefied natural gas carriers

Nakilat has acquired the full ownership of four Q-Flex liquefied natural gas (LNG) carriers from its joint-venture partner, International Seaways, Inc. (“INSW”) following execution of a sale and

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purchase agreement for the acquisition of the remaining 49.9% ownership interest in these vessels from INSW. This brings the total number of vessels wholly-owned by Nakilat from 25 to 29 LNG vessels, out of its overall fleet of 74 LNG and liquefied petroleum gas (LPG) vessels. With a cargo carrying capacity of 217,000cbm each, the four LNG carriers have been operated and managed in-house by Nakilat’s ship management arm, Nakilat Shipping Qatar Limited (NSQL), since 2014. This is in addition to the other 10 LNG and 4 LPG carriers under NSQL management. Chief Executive Officer of Nakilat, Eng. Abdullah Al Sulaiti, said: “The 100% ownership acquisition of these four vessels comes as part of Nakilat’s long-term strategy to capitalize on such strategic investment opportunities. These vessels are chartered to our long-standing partner Qatargas, the world’s largest exporter of clean energy. Owning the vessels that we manage allows Nakilat to consolidate its fleet, provides greater operational flexibility and optimization of resources, leading to the realization of cost savings with minimal risks and strengthens our customer focus. In addition, this transaction affirms the strong financial standing of the company and our commitment to maximize value for our shareholders, in alignment with our vision to be a global leader and provider of choice for energy transportation and maritime services.” Nakilat’s LNG shipping fleet is among the largest in the world, comprising of 14 Q-Max, 31 Q-Flex and 24 conventional vessels (includes four newbuilds). The company also owns 4 liquefied petroleum gas (LPG) and one Floating Storage Regasification Unit (FSRU) as part of its fleet.

https://www.hellenicshippingnews.com/nakilat-signs-agreement-for-full-ownership-of-four-q-flex-liquefied-natural-gas-lng-carriers/

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

UPS strengthens efforts towards sustainability, will buy 6,000 NGVs

UPS announced plans to purchase more than 6,000 natural gas trucks beginning in 2020 and running through 2022. This three-year commitment represents a $450 million investment in

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expanding the company’s alternative fuel vehicle fleet as well as supporting infrastructure. It will help reduce UPS’s carbon footprint and is expected to have a positive influence on national CNG market growth. The CNG fleet expansion will also provide additional capacity for expanding the use of biomethane.  As of October 2019, UPS has agreed to purchase 230 million gallon equivalents of biomethane over the next seven years, making the company the largest consumer of biomethane in the transportation industry. “UPS continues to expand and improve our smart logistics network by implementing new technologies and creating a highly flexible, data-driven, and sustainable network,” said Juan Perez, chief information and engineering officer, UPS. “That is why we intend for 25% of our vehicles purchased in 2020 to run on alternative fuels.” The vehicles will be equipped with CNG fuel systems provided by Agility Fuel Solutions, a business of Hexagon Composites. Since 2016, Agility has provided natural gas fuel storage and delivery systems to more than 1,700 UPS trucks. As part of the new agreement, which represents a total value of $65 million to $95 million over the three-year period, Agility will deliver complete end-to-end natural gas systems for heavy-duty trucks, terminal tractors and medium-duty walk-in vans. These will include on-board CNG fuel storage and management and Agility’s certified natural gas engine fuel systems. Over the past decade, UPS has invested more than $1 billion in alternative fuel and advanced technology vehicles and fueling stations to help meet its target of reducing absolute greenhouse gas emissions by 12% across its global ground operations by 2025. UPS has continued its relationship with TruStar Energy to design, manufacture and install five new CNG stations in Lathrop, Visalia and Moreno Valley, Calif., Houston, Texas, and Cleveland, Ohio. UPS will deploy the new NGVs on routes to utilize the new CNG stations as well as adding to existing natural gas fleets in other UPS locations. By the end of 2019, UPS will be operating 61 natural gas fueling stations strategically located across the U.S., and outside the U.S. in Vancouver, Canada, and Tamworth, United Kingdom.

http://www.ngvjournal.com/s1-news/c3-vehicles/ups-strengthens-efforts-towards-sustainability-will-buy-more-than-6000-ngvs/

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Portuguese bus maker presents new hydrogen-powered model

Aware that each city has its own unique traits and challenges, CaetanoBus has expanded its zero-emission product portfolio with the development of a hydrogen-powered bus, the H2.City Gold.

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According to the company, this brand new bus is yet another way to expand environmentally friendly fleets and complement the ones that run on other alternative fuels. Presenting a high environmental performance with no CO2 emissions, the H2.City Gold takes advantage of the best of Toyota technology and CaetanoBus’ engineering capacity. Thanks to the fast refueling time and the high range of the vehicle, bus operation is not limited, a major advantage for the operator. The bus has an autonomy of 400kms on a single refill, a differentiating feature in the fuel cell buses market. It also stands out for its high modularity, comfort, safety and user-friendliness. Available in 10.7 or 12m, LHD and RHD versions, it is easily adaptable to any urban environment. Fuel tanks are stored on the vehicle roof, meeting the safety requirements. The bus is equipped with hydrogen leakage sensors in the fuel cell and hydrogen tanks. This is an innovative product that reflects the economic and environmental benefits of hydrogen towards a decarbonized society, and is another significant step forward in the development of mobility solutions for zero-emission public passenger transport. “We have the dream to combine our growth with urban sustainability and to build the future of cities with our partners. We can proudly say that we are prepared for the future of mobility with a wide range of zero-emission solutions,” said the company in a statement.

http://www.ngvjournal.com/s1-news/c3-vehicles/portuguese-bus-maker-presents-new-hydrogen-powered-model/

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Hyundai and Cummins join forces to develop hydrogen fuel cell systems

Hyundai Motor Company and Cummins Inc. have entered into a memorandum of understanding (MOU) to jointly evaluate opportunities to develop and commercialize fuel cell powertrains.

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These new powertrains are expected to be developed by combining Hyundai’s fuel cell systems with Cummins’ electric powertrain, battery, and control technologies. The initial development will be focused on the North American commercial vehicle market, including working with North American OEMs on the integration of these systems into their vehicles. The companies will also explore ways they can work together to develop next generation fuel cell systems, and have each committed to assign a team of individuals to investigate and pursue other areas of collaboration. “This partnership is a terrific opportunity for both companies to leverage our respective strengths and create new opportunities to grow and broaden the product portfolio we bring to our customers,” said Thad Ewald, Vice President, Corporate Strategy, Cummins Inc. “We’ve made significant investments over the past year to accelerate our fuel cell capabilities including our acquisition of Hydrogenics and this partnership is another step forward.” “With our leadership in fuel cell systems coupled with Cummins’ unparalleled technologies, we expect this partnership to leave a mark in the commercial vehicle market,” said Saehoon Kim, Vice President and Head of Fuel Cell Group at Hyundai Motor Group. “Collaborations such as this will enable us to further diversify our business, as well as reinforce our global hydrogen leadership through sales of new and existing Hyundai fuel cell systems.” This partnership provides a springboard for Hyundai Motor Company to increase its presence in the North American commercial vehicle market, and Cummins to enhance its product portfolio by adding Hyundai’s advanced fuel cell technologies. The new collaboration may extend beyond the commercial vehicle market, as the companies will also evaluate the development of fuel cell power generators. The availability of reliable back-up power generation to prevent data loss in emergency situations is a business-critical requirement for many organizations. Fuel cell back-up power generation is attractive for its reduced carbon footprint.

http://www.ngvjournal.com/s1-news/c7-lng-h2-blends/hyundai-and-cummins-join-forces-to-develop-hydrogen-fuel-cell-powertrains/

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Hydrogen: Future Marine Fuel?

The maritime industry is slowly moving towards a clean and renewable future. Cryo Shipping aim to take lead in the future green energy development, and have received government grants

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for developing suitable infrastructure solutions for supply of fully renewable energy as marine fuel. CRYO Shipping is cooperating with major players in the hydrogen industry, and initially serving the bold Norwegian shipowners who are taking early positions as consumers of fully renewable marine fuels. Partner and project manager in Cryo Shipping, Are Magnussen, says “hydrogen as marine fuel is in an early phase, and that we still have a way to go with regards to developing suitable concepts, technical  solutions, regulations and operational requirements”. Cryo Shipping is established as a supplier of Natural Gas, but are also focusing on even greener energy sources such as Bio Gas and Hydrogen.

https://www.hellenicshippingnews.com/hydrogen-future-marine-fuel/

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