Insatiable Energy Appetite of China & India: Myth or Reality?

ess than a year ago, informed observers told us that the ‘insatiable appetite’ for energy and other commodities of China and India would be exactly that – ‘insatiable’. As a result, prices for commodities especially that of crude oil was predicted to reach stratospheric levels. The National Intelligence Council of the United States argued in its report ‘Global Trends 2025’ released last year that significant growth in demand for energy in general and oil in particular from India and China combined with constraints on new production, such as the control exerted by state-run companies in the Middle East was among the biggest threats to global energy security.

Though current oil prices have defied these predictions, the prospect of the undemocratic governments in the Middle East controlling supply and insatiable appetites of the unwashed masses in Asian Developing Countries controlling demand for oil continues to haunt political analysts. The same prospect - that of increasing demand driving oil prices – appears to be a source of optimism for commodity investors. Both perceptions are rooted in growth prospects of China and India, the depletion of natural resources such as oil, fears over resource nationalization and under-investment in the energy sector.

Both camps are bound to be disappointed if they study the record of commodity prices over the last 200 years. Data on major industrial commodity show that current prices adjusted for inflation are 75 percent below their levels in 19^th Century. The real price of oil today is at the same level as it was in 1870. Consistent discovery of new fields and greater energy efficiency in developed and developing countries is behind this long term decline and this long term trend is likely to continue. History also shows that spikes in oil prices have lasted for just over 4 to 7 years while a decline in oil prices has lasted for anywhere between 11 to 27 years.

Until very recently history was trusted, at last by investors who saw commodities as a losing proposition. In 2005 the spot prices for oil were higher than futures prices because there was strong belief that prices would follow the historic downward trend. Yet today many seem to be ignoring the lesson from history. Oil for delivery in three years is trading at about $ 70 per barrel compared with the current spot price of about $ 50 per barrel. There are predictions that oil price will be around $ 90 a barrel by 2012. Prices of other commodities are also expected to rise. Many traders are betting that China’s recovery will reverse the decline in commodity prices. Even a small decrease in the rate of decline or the announcement of a stimulus plan in China is greeted with joy by commodity traders. This optimism appears to be misplaced. China grew at an average of 9 percent in the 1980s and 90s but prices for most commodities remained low and stable. The price of oil for example did not break the barrier of $ 40 a barrel. China contributes 10 percent of global output but consumes 25-50 percent of most commodities. It is already evident that this export oriented trend is unsustainable. China’s focus is shifting inward and it is likely to emerge with an energy efficient economy in the next decade.

As India and China get richer, their per capita consumption of energy and other commodities per unit of economic output is bound to decrease. This is an idea that is exploited in recent Chinese and American statements about carbon emissions. Rather than emitting fewer tons of carbon, China has reiterated the target that it set a year ago of reducing energy consumption per unit of economic output by 20 percent between 2006 and 2010. The U.S. target of reducing emissions intensity by 18 percent between 2002 and 2012 is based on dematerialization (lowering of energy required per unit of GDP) and decarbonization strategies. It is a myth that the ‘insatiable appetite’ for oil and other commodities flowing from growth in China and India will inexorably drive up prices and destabilize global political order.

Global Warming and India - A Critique on National Action Plan on Climate Change (part – III)

Shankar Sharma, Consultant to Electricity Industry

Continued from Volume V, Issue No. 45…

B. Water:

· The approach towards water must not be purely targeting an increase in the resource base, in any case not through more large projects. Equity and access to water for all through rights based regime must be a central plank for any plans that the government implements.

· In this light, suitable changes must be made to the National Water Policy. For the formulation of a new NWP, a detailed participatory exercise should be started immediately. The NAPCC recommends such review only in consultation with states, but this process has to start from the people and would have to be aimed at a new NWP.

· Stop the ongoing destruction and neglect of natural, local and traditional water harvesting systems (including tanks, wetlands, johads, flowing rivers) and rehabilitate the systems that have been already destroyed, create new systems were possible, as first priority when going for new developments

· Emphasise on groundwater recharge and rainwater harvesting strategies. Groundwater is India’s water lifeline and that lifeline can be sustained only through direct recharge where appropriate and through protection, rejuvenation and creation of local water systems.

· Make available adequate funds in the budget to maintain the existing water related infrastructure rather than spending money on new schemes. For example, there is a need to ensure that dams and canals do not get silted up quickly and therefore there is a need to make adequate investments for catchment area treatment of existing large, medium and small dams. Similarly, maintenance of the canal infrastructure to ensure optimum use of created infrastructure should be given first allocation of available resources. To ensure that all this actually gets done in a transparent way and accountable way, the governance in water sector will have to be changed so that the local people have decisive say in planning, decision making, implementation and operation of the systems.

· To ensure proper and optimum functioning of the existing and under construction reservoirs in the interest of the people, each reservoir should have a reservoir operation committee, in which at least 50% members should come from the local communities. As a first step in this direction, the reservoir operation rules and actual reservoir operation details (inflows, outflows, levels, capacities, and anticipated inflows) should all be made public on daily basis for each large dam in India.

· Similarly for embankments, canals, pipelines, and other related water infrastructure such committees should be formed right from planning stage of the projects and they should be statutory bodies with powers to make necessary mandatory orders with respect to the functioning of the projects.

· While considering new storage requirements, the priorities should be in following order:

i. For ensuring sustainable use of created capacities, e.g. arresting siltation.

ii. For ensuring optimum use of the created capacities, in large number of cases it has been found that huge quantities of water remain unused till the next monsoon arrives

iii. For groundwater recharge

iv. For creating local water systems through tanks, lakes, wetlands, watershed development and so on

v. Only after all this has been shown to be exhausted in a credible way, should a larger project in any basin be considered.

· There should be an assessment of contribution of GHG emission by various crops, the organic and chemicals based crops, the SRI and non SRI crops.

· There are a very large number of ongoing big irrigation projects, many of them are non viable or amounting to zero sum game as the basins or sub basins where they are situated are already over exploited. They are drain on the economy and there is need to put in place a credible, independent system to ensure that unviable and undesirable projects may be weeded out or scaled down appropriately.

· The waste water treatment systems would work only when it is more decentralized, and not centralizes as is the norm now. The decentralized systems would also be less energy intensive, less cost incentive, more efficient and is actually likely to lead to more recycling of the treated water.

C. Energy:

· Indian energy sector requires a complete over-haul – starting from a shift in policy direction. Hence, there is a need for a paradigm shift in the energy policy and direction which is currently articulated in the “Integrated Energy Policy” of the Planning Commission. The current energy policy needs to factor in the huge potentials of energy efficiency, DSM and renewable energy in the country, and also follow a sustainable path way in addition to being low-carbon.

· There is an urgent need that the energy growth is de-coupled from GDP growth. Energy Projections should factor in huge potential in efficiency improvement, energy conservation and demand side and peak hour power demand management measures.

· There is a critical need for a paradigm shift in emphasis from “Centralised Energy systems” to de-centralised energy systems. There are clear advantages from the decentralized system which is evident from:

§ Reduced Losses

§ Increased efficiency

§ Reduced infrastructure cost

§ Better quality

§ Rural development and livelihood generation

§ Inclusive growth and energy secure communities

§ Potentially more democratic systems with participation of the people at all levels

Hence to promote decentralized energy systems, there should be policies which would incentivise decentralized systems.
Energy Efficiency and energy modesty needs to become the center piece of the national and state energy policy since energy saved is as good as energy produced. The only way to balance economic growth and satisfy domestic consumption needs without endangering the future of life on the planet is by gradually raising the level of energy efficiency of all domestic, commercial, industrial and agricultural usage.
Starting with the areas of highest energy consumption, the government should put legislation in place to promote innovations towards energy efficiency and phase out wasteful uses and practices. Specifically, the government should implement progressive and mandatory energy efficiency standards cutting across all energy applications in the country. These standards should have clear time lines.

to be continued…

Views are those of the author

Author can be contacted at [email protected]

India’s Changing Gas Scenario: The New Imperatives (part – V)

Continued from Volume V, Issue No. 45…

t the margin, shortfall in supply is partly made good through import of spot cargos. Even in spot markets both availability and pricing are grave concerns. Globally the numbers of cargoes that are available for spot trades are limited. As of now, sourcing spot cargoes is an extremely difficult task given that large consumers such as Japan, Korea and the USA are not limited by the ‘affordability’ factor and are willing to pay more than $ 16 per mmbtu. Even though some Indian consumers have had to pay over $15 per million btu for essential needs, it is not a price that is sustainable in India at this point. However future price prospects for Indian LNG imports are definitely not bright. With the crude prices well above $ 100 per barrel, the price of LNG in international market is likely to remain high. This makes the case attractive for increasing availability of deregulated gas, the share of which is expected to increase from 12 per cent in 2001 to almost 54 per cent by 2009.

If the Government honours its commitment toward market pricing for gas there is a huge potential for more investments in gas exploration and production in India. The Governments approach in NELP contracts does not offer much hope as it appears to be offering the ‘market mechanism’ for energy price only as long as it does not have to implement it. This does not necessarily build trust between the investor and the Government. Given that the only other option available is to source LNG from the global market with ever growing volatility, inviting investment in domestic hydrocarbon prospects is definitely a more attractive prospect for increasing India’s energy security.

Inefficiency penalises use of Natural Gas for power generation

The average Indian energy consumer pays an ‘inefficiency-tax’ resulting in his energy price being about 30 percent higher than that paid by consumers elsewhere in the world. Renewable energy is competitive in India partly because conventional forms of energy are produced and distributed inefficiently despite lower prices for domestic sources of energy such as coal. Though efficiency in energy production and consumption has improved dramatically both in industrial and commercial sectors, huge efficiency gaps persist in the sector. Domestic coal prices are known to be substantially lower than international prices but this does not automatically translate into lower energy prices for the Indian consumer. In fact coal may not be ‘under-priced’ within the domestic context as the domestic coal sector operates as a state sponsored monopoly charging monopoly prices for coal. There is no Regulatory oversight of the coal sector despite the crying need for it.

The lowest price for coal quoted in Pit Head Ultra Mega Power Projects comes to about Rs 0.30 per unit but the basis on which this price is arrived at is not clear. Rs 0.30 may very well include the price of inefficiency in coal mining being passed on to the consumer. Electricity available at the bus bar at a price of Rs 2.50 per unit is sold to the consumer at an average price of more than Rs.4.50 reflecting primarily transmission and distribution inefficiencies. In this light, the upper limit of $ 6 per mmbtu for gas delivery to power producers penalises gas producers in order to accommodate generation, transmission and distribution inefficiencies.

A study carried out by the international Energy Agency and the Exxon Mobil puts the long-term prices of carbon emissions at about € 30 per ton of CO₂. This alone is equal to a price of $ 5-6 per mmbtu. For India this raises many questions. As mentioned earlier, coal is a highly under-invested sector in India and as a consequence the real cost of extracting coal in India is unknown. Without accurate estimates of the real cost of coal, one cannot really estimate CO₂ abetment cost or establish the relative advantage of natural gas. The important question now is whether the average Indian energy consumer, who is already burdened with the cost of inefficiency, can also bear the additional cost of carbon emissions?

Regulation of the Natural Gas Sector

Background

The Petroleum & Natural Gas Regulatory Bill was passed in 2006. In October 2007, the Ministry of Petroleum & Natural Gas notified the Act and the Petroleum & Natural Gas Act came into force with all provisions [except Section 16] and the Petroleum and Natural Gas Regulatory Board was constituted.

The Act provides for fostering fair-trade and competition in the market which would be among key guiding principles of Regulatory activities by the board. One of the basic mandates of the Petroleum & Natural Gas Regulator is to address the interests of the customer without compromising the interest of the producer. The basic premise is not regulation per se but expedition of the price mechanism so that the market will determine the price of the commodities in the sector. Dispute between entities would first be addressed in the Petroleum & Natural Gas Regulatory Board [PNGRB] then by the appellate authority and then by the High/Supreme Court. The Regulatory Board is in the process of finalising gas pipeline regulations and is taking all the steps necessary to make it a participatory process.

Selection of PNGRB Provisions

- The mandate for the Regulator includes authorization for establishment of LNG terminals, city gas as well as the transmission pipelines, declaring pipeline as a common carrier, regulating transportation tariff, maintaining a databank on petroleum, petroleum products and laying down technical and safety standards.

- The Regulator is not explicitly responsible for setting the price of natural gas but Regulatory intervention is available in case of price disputes.

- Predatory pricing strategies found to be driving out players from the field will invite Regulatory intervention

- Transportation tariff, pipeline and City Gas Distribution (CGD) are other areas where Regulatory intervention would be available.

- Authorisation by the Regulator would be required for laying pipelines and for city gas distribution and the Government has no role in the authorization process. [After the Act has come into force, only entities with authorization by Central Government obtained prior to 1st October 2007 would be allowed into these activities]

- Consumer protection by the Regulator under the Act flows from the notification of petroleum products and natural gas by the ministry. But so far the ministry has not notified any petroleum product or natural gas. Until such notification is issued, retail service obligations and market service obligations cannot be enforced.

- Draft regulations for city gas distribution along with two other regulations which are linked to it have already been put on the public domain seeking comments from all concerned. The eligibility criteria for city gas distribution include technical capability, financial capability as well as biddable criteria on the basis of which the outcome would be decided.

- There are three biddable criteria. The highest weight would be given to the transportation tariff that the bidder indicates. The next criteria would be the capex on infrastructure and the phasing of that investment in the exclusivity period. The third criteria would look at connectivity and the number of connections of piped natural gas for residential units during the exclusivity period. The bids will be decided on the basis of net present value of the biddable criteria.

- To facilitate investment and to lower the risks, two periods of exclusivity are provided. One is commercial exclusivity for a period of five years from the date of authorization during which the entity which has got the authorisation has the sole right to market gas through the network that it is laying. The other is infrastructural exclusivity that is for the economic life of the asset [25 years]. After the period of commercial exclusivity, a third party would have access to the transportation network for the assigned transportation tariff.

- As far as network tariff is concerned, it would be decided on the basis of the specified formula. In the case of multiple bids the guiding principle would be that the lowest tariff would be accepted. Existing networks would not be required to go through a bidding process and would continue on a normative basis but they will be subjected to all the obligations and terms & conditions that are applicable to other bidders.

- Reasonable return for investors is not explicitly stated but it would be decided every year keeping in mind the requirement of the investors so as to offer a comfort level that they deserve.

Limitations of the Petroleum & Natural Gas Regulatory Bill

The development of a Natural Gas Market in the country has been left out of the purview of the Act which is regrettable especially in the light of the fact that the provision for trading electricity to promote the development of a market for electricity is explicitly included in the Electricity Act. Without the provision to facilitate the development of a market for natural gas, the Regulator would be unable to ensure optimal utilization of natural gas, facilitate price discovery or promote transparency. Disputes over pricing of natural gas cannot be resolved unless a market for gas is developed. This is one of the major shortcomings in the Petroleum & Natural Gas Regulatory Act.

Issues for Regulation

Regulatory oversight is inescapable in order to bring equity in the field and to balance the complex spectrum of issues in the sector until the market matures. In India Regulatory reforms assume significance given that there are only a limited number of players in the arena which has serious infrastructural constraints.

The need for extended Regulatory oversight has been well demonstrated by the experience of developed countries including USA, which is the largest and most highly developed gas market in the world with the most extensive pipeline network. The US gas market was regulated for a substantial period of time from mid-50s to the mid-90s. The issues of open access by separation of carrier and content were major constraints that regulation had to overcome. In the Indian context, the Natural Gas sector can draw from the experience of the power sector which has made substantial Regulatory progress.

- The use of the postage stamp system where distance is used as the basis for gas transportation tariff would result in imbalances in India because most of the consumers would want to set up plants in the East Coast where production of gas is located.

- Open access will become relevant in India only when there is definite capacity in a pipeline system.

- Third party access to LNG terminals is an issue that Regulators may want to consider.

- Exclusivity clauses may have to be clarified more clearly in terms of geographic boundaries. If there are entrepreneurs who could take larger risks there is no reason why exclusivity should be a barrier. If open access is available competition is ensured making exclusivity redundant.

- The process of regulation has to be transparent. However it must be understood that there is a trade off as transparency always calls for greater number of conditions.

- In projects where producers are supplying gas or other energy commodities such as electricity or petroleum the question as to whether they should be actual shippers of the commodity must be resolved.

to be continued…

ORF-IEF Conference Summary Report November 2007

NEWS BRIEF

NATIONAL

OIL & GAS

Upstream

OVL to invest $1.45 bn in Iraq block

May 4, 2009. ONGC Videsh Ltd. is likely to invest US$1.45bn in an oil block in Iraq that was awarded to it by the erstwhile Saddam Hussein regime. The service exploration and production contract for Block-8 have been concluded and the agreement is likely to be signed in the next couple of months, an official was quotes as saying. The government formed after the US invasion of the oil-rich country, sought re-negotiation of the contract which has now been concluded. The block already has a discovery and is estimated to hold 645mn barrels of inplace reserves, of which 54mn are recoverable.

OVL, IOC, OIL to invest $4 bn in Iran gas field

May 1, 2009. ONGC Videsh Ltd and its partners Indian Oil Corp and Oil India Ltd are likely to invest about USD 4 billion to start production from a massive gas field they discovered in offshore Iran, in the next 3-4 years. Iran had in September 2008 approved the commerciality of the discovery and the three partners are now in the process of preparing a development plan. Investments may be in the range of USD 4 billion. The discovery, which was subsequently named Farzad gas field, has inplace reserves of up to 21.68 trillion cubic feet (Tcf), of which recoverable reserves may be 12.8 Tcf. The Indian firms want to liquefy the gas and ship it to India in the form of liquefied natural gas. OVL, which holds 40 per cent interest and is the operator of the block, has also submitted a feasibility report for the one billion barrel oil discovery it made in 2006. Oil was found in the BB structure in 2006, the discovery has been named Binaloud.

March oil output dips 2.3 pc yoy

April 30, 2009. India produced 2.3% less crude oil in March, the fourth consecutive monthly decline in output. According to government data, Oil & Natural Gas Corp. (ONGC) and other producers extracted 2.86mn metric tons of crude oil last month compared with 2.93mn tons in the same month a year earlier. Output in the year ended March fell 1.8% to 33.5mn tons. India's crude oil imports rose 11.7% in March, according to provisional data provided by the Petroleum Ministry. The Government imported 11.7mn metric tons of crude oil last month. Separately, local refineries increased fuel production 3.3% in March after Reliance Petroleum Ltd. started operating a 29mn tons-a-year refinery at Jamnagar in Gujarat last month.

Petronet to buy stakes in Papua New Guinea gas fields

April 29, 2009. Petronet LNG Ltd. may buy stakes in gas fields in Papua New Guinea and Australia in partnership with Oil & Natural Gas Corp. (ONGC). Petronet also plans to set up gas liquefaction plants in the two countries involving a total investment of US$20bn.

Downstream

Essar Oil scale up ability to process heavy, sour crude

May 5, 2009. Essar Oil Ltd, which commissioned its 10.5 million tonne per annum petroleum refinery last May, has successfully expanded the capacity to 14 mtpa. The company had shutdown its Gujarat based refinery from April 18 for the expansion work, which was commissioned on May 3. The company has not published its results for the March 2009 quarter, but for the first nine months of the FY09 the company has incurred a net loss of Rs 1174 crore. This was due to a foreign exchange loss of Rs 679 crore on account of rupee depreciation and Rs 524 crore loss on inventory due to fall in petroleum prices. At the same time, heavy interest and depreciation are also taking their toll on the company’s performance. During the first nine months of FY09 the company accounted for nearly Rs 1250 crore of interest and depreciation costs.

IOC encashes Rs 50 cr bank guarantee

May 5, 2009. State-run Indian Oil Corp (IOC) has encashed a Rs 50 crore bank guarantee after a cheque issued by Kingfisher Airlines towards fuel dues bounced. IOC encashed the bank guarantee Kingfisher had given for buying aviation turbine fuel or ATF for its fleet of 75 aircraft, 10-days back. As on April 20, the private air-carrier owed IOC about Rs 160 crore in fuel bills. It sent a cheque of the amount to IOC but the cheque bounced, forcing IOC to encash the bank guarantee. Besides IOC, Kingfisher owes HPCL -- its largest ATF supplier -- Rs 336 crore and BPCL another Rs 290 crore. The company had put Kingfisher on cash-and-carry about 2-3 month back after the airline failed to honour its commitment of making timely payments for past fuel dues as had been agreed last year. Both IOC and BPCL have stopped credit to Kingfisher and are asking the airline to make payments for every refueling. HPCL, however, continues to give some credit to the airline. They said Jet Airways, the other private carrier, which was part of the bailout package, has been clearing its dues regularly. Its outstanding to IOC was just Rs 30 crore and it owed another Rs 80 crore to BPCL.

Chevron sells 5 pc stake in Reliance Inds

May 2, 2009. Mukesh Ambani-run Reliance Industries Limited (RIL) has bought back US energy giant Chevron Corp's 5% stake in Reliance Petroleum for Rs 13.50bn, according to a report.

Chevron India Holdings has sold 22.50 crore shares, representing 5% stake in RPL, to Reliance Industries (RIL). RIL has paid Rs 60 per share aggregating to Rs 13.50bn. Last month, RIL merged RPL with itself in an all-share deal valued at about Rs 85bn. Pursuant to the acquisition, the promoter group firm RIL holds a 75.38% stake in RPL.

IOC to expand Panipat refinery by 25 pc

April 29, 2009. Indian Oil Corp. (IOC) contrives to shut half of its 240,000-bpd in northern India for 45-50 days in March-April next year in order to increase its capacity to 300,000 bpd. This will be a major shutdown.

Transportation / Trade

RIL may ink gas sale pact with Ratnagiri Gas

May 5, 2009. Reliance Industries Ltd. (RIL) may sign an agreement to sell gas to Ratnagiri Gas & Power Pvt. Ltd. (formerly Dabhol Power Company). According to reports, Ratnagiri board is scheduled to meet on May 8 to consider the accord to buy 2.5mn cubic meters a day of gas from RIL.

The agreement would benefit RGPPL as its contract with Petronet LNG is slated to expire by September. The power plant requires about 5.6 mmscmd by October to double its generation capacity to 1,200 mw. It will need gas of 8.4 mmscmd to run the plant at full capacity of 2,150 mw.

According to an official of the Maharashtra State Electricity Distribution Company, the agreement is likely to be signed at the government approved well-head price of US$4.2 per million metric British thermal unit (mmBtu). RGPPL will have to pay an additional US$1 per unit for transportation.

Great Eastern Energy commissions second pipeline in WB

May 4, 2009. Great Eastern Energy Corporation Ltd. has commissioned its second natural gas pipeline extending 12.35 km from its Central Gathering Station in Asansol to Kulti, West Bengal from April 19 onwards. This is the Company's second Coal Bed Methane gas pipeline and will be part of a vertically integrated network consisting of drilling, production, compression transportation and distribution services.

GAIL to supply gas to Barauni fertiliser and Bettiah pw plant

May 3, 2009. Gas Authority of India Ltd (GAIL), natural gas major, would supply gas to Barauni fertiliser factory and its 250-300 MW power plant at Bettiah through its 1400 km Jagdishpur-Haldia pipeline by 2012. The two spur lines would be laid down from Bakhtiarpur to Barauni and the other from Bakhtiarpur to Champaran via Chhapra.

GAIL would supply 2.11 MMSCMD gas from its first spur line to the fertiliser factory, which would be revived by June 2012 through special purpose vehicle (a joint venture company promoted by NFL, RCF and KRIBHCO) under the name of Urvarak Videsh Ltd, for a period of 15 years from the date of commencement of supplies. GAIL would make an investment of around Rs 30,000 crore in next four to five years on doubling of pipeline length from the current 6,700 km.

GAIL yet to tie up forward linkages for Dabhol-Bangalore line

May 2, 2009. Gail India is yet to tie up the forward linkages for gas transmission to Bangalore. Forward linkages implied getting into take or pay contracts with potential buyers of gas. Gas buyers normally enter into long-term purchase contracts.

Potential customers for gas include power plants, fertilizer plants, and small scale industries. Demand assessment for the Dabhol-Bangalore pipeline was made three years ago, and is being updated. Gail has received approval for 5,500 kms of the new pipeline, which it plans to implement in two phases over the next three years with a total investment of Rs 20,000 crore.

GAIL signs gas cooperation agreement with Karnataka

April 30, 2009. Gail India Limited and Infrastructure Development Department, Karnataka has signed a Gas co-operation agreement in Bangalore.

The Gas co-operation agreement between GAIL and IDD, Karnataka aims to develop the natural gas distribution and city gas infrastructure, to develop the use of eco-friendly fuels, especially Natural Gas/PNG/R-LNG and to promote a Joint venture for domestic, industrial and transport sectora in the state of Karnataka.

Policy / Performance

Ministry raps ONGC, bonus under cloud

May 5, 2009. Continuous fall in its crude oil production over the last three years may force Oil and Natural Gas Corp (ONGC) to cut down the performance-related incentives to its employees. At a recent performance review meeting of ONGC, the company was pulled up by the ministry for yet another drop in its crude oil production for 2008-09. The official said that ONGC has been told that if the internal crude oil production targets (7.4 million tonnes) set by it for the first quarter of 2009-10 are not achieved, “it may consider whether the performance related incentives are to be granted to all officials for the period.”

Govt to reallocate RIL gas if existing buyers back out

May 4, 2009. The government will allocate natural gas from Reliance Industries' Bay of Bengal KG-D6 fields to companies like Essar Steel if any of the consumers it has currently identified is unable to use the fuel. An Empowered Group of Ministers (EGoM) on April 9 decided to give any unutilised KG-D6 gas to steel plants who are currently not being supplied their full share of administered price fuel, official sources said. After gas-based steel plants, allocations would also be made to existing gas-fired power plants and to other power plants including captive power plants depending upon the availability of the unutilised gas. Essar Steel's Hazira plant in Gujarat was allocated 2.11 million cubic meters per day of gas from Oil and Natural Gas Corp (ONGC) fields that is sold at regulated rates of around USD two per million British thermal unit. But it currently gets only 0.66 mmcmd due to declining output of regulated gas.

Fitch assigns A+(ind) to HPCL - Mittal Energy

May 4, 2009. Fitch Ratings has assigned India's HPCL - Mittal Energy Ltd. (HMEL) a National Long-term rating of 'A+(ind)'. The agency has also assigned ratings of 'A+(ind)' to HMEL's total sanctioned term loans aggregating to Rs77,930mn. HMEL is a joint venture (JV) between Hindustan Petroleum Corporation Limited (HPCL) and Mittal Energy Investment Pte Ltd (MEIL) for the setting up of a 9 million tonnes per annum (mtpa) green-field petroleum refinery in the state of Punjab.

RIL may not raise fresh funds this fiscal

May 2, 2009. India’s most valuable company Reliance Industries (RIL) may neither start any greenfield initiative nor raise new funds in the current financial year, as the oil-to-retail conglomerate looks to consolidate its diverse portfolio of businesses and improve operational efficiency. This will be a sharp departure from previous company policy of investing heavily in new projects. In the past few years, the Mukesh Ambani-controlled RIL has undertaken mega projects such as the $6-billion refinery in Jamnagar special economic zone (SEZ), the $9-billion deep water gas development project in the Krishna-Godavari basin, the launch of Reliance Retail and SEZs in Haryana and Jamnagar.

Reliance Gas seeks nod to levy transportation charges

April 30, 2009. Reliance Gas Transportation Infrastructure Ltd (RGTIL) has approached the competent authorities to seek a nod for the transportation tariff to be levied by it for ferrying Reliance Industries Ltd’s (RIL) D6 Block gas. RGTIL has approached the Petroleum & Natural Gas Regulatory Board (P&NGRB) with an indicative tariff structure. RGTIL, which has already inked a Gas Transportation Agreement (GTA) with consumers for ferrying the Krishna Godavari Basin D6 Block of RIL, is understood to have opted for a two zone tariff structure, which will be applicable for 2009-10. The tariff for the first zone is likely to be between 30 and 40 cents per mBtu (about Rs 20/mtbu) and the second zone about $1.25 per mBtu (Rs 60-70/mbtu).

Asset impairment dents Aban’s profitability

April 29, 2009. Aban Offshore, the country’s largest offshore oilrig service provider, reported a consolidated loss of Rs 93 crore for the quarter-ended March 2009 despite growing its revenues by over 17 per cent on a year-on-year basis. While waning demand for oil rigs and falling rig rentals resulted in four of Aban’s assets lying idle, the net loss was driven primarily by a one-off asset impairment charge of Rs 151 crore on the capital expenditure incurred on its jack-up rig Murmanskaya.

POWER

Generation

BHEL to invest Rs 12,000 cr in 4 years for expansion

May 5, 2009. Power equipment maker BHEL announced an investment of Rs 12,000 crore over the next four years to pick up equity in power projects and to ramp up its capacity to support the generation of about 20,000 MW. BHEL's current manufacturing capacity can support power generation of 10,000 MW. It includes 2,500 MW of hydro electricity production, and 500 MW captive power plants for the industrial sector. A thousand MW is exported and the power plants coming up can generate 6,000 MW. By the end of this fiscal, the company hopes to make equipment for generating 15,000 MW. Currently, BHEL is operating at more than 100 per cent capcity and ends up supplying supplying equipment to generate 11,500 MW.

NTPC likely to set up 600 MW hydel project in Bhutan

May 3, 2009. Thermal power producer NTPC is in talks with the Bhutan government for setting up a 600 MW hydel power plant envisaging an investment of over Rs 3,600 crore. The company is preparing a Detailed Project Report (DPR) for the 600 MW Amochu hydro power project in Bhutan.

NTPC has started working on the DPR, two months ago and is likely to complete it by early 2011. Besides, the power major is also preparing the pre-feasibility report for the 5,000 MW Siang hydro power project in Arunachal Pradesh. The pre-feasibility report would conclude in six months from now. NTPC is currently executing three hydro electric power projects--- 800 MW Koldam in Himachal Pradesh, 600 MW Loharinag Pala (Uttarakhand) and 520 MW Tapovan Vishnugad (Uttarakhand).

Hydel power generation plummets to 1300 MW in Gujarat

May 3, 2009. Owing to insufficient rains hydel power generation has reduced dramatically and there is not much power generated from thermal power pants too hence the power scenario is very grim in the State. During evening hours power demand of the State is 6000 MW and against this maximum possible power generation is 4600 MW thus there is shortage of 400 MW during evening hours. However, situation is worse during daytime when power demand is 4600 MW and supply is only 3300 MW thus there is shortage of 1300 MW electricity during daytime.

ICVL may bid for a coal block in Mozambique

May 2, 2009. International Coal Ventures Ltd (ICVL) — an SPV created by five PSU majors including Coal India and SAIL — may bid for a coal block in Mozambique this month. According to sources, ICVL representatives have completed an initial survey of the asset and will seek board approval to bid for the same within a week.

The last date of submission of bid is May 15. CIL and SAIL each hold 28 per cent stake in ICVL, the other partners being RINL, NTPC and NMDC. Mozambique, which has one of the largest reserves of thermal as well as coking coal in the world, recently offered block A1 and A2 to CIL as part of a concession agreement.

Punj Lloyd in talks with Areva, Westinghouse for N-plant tie-up

May 2, 2009. Punj Lloyd Ltd is in talks with French nuclear power major Areva NP and US-based Westinghouse Electric for a tie-up to build nuclear power plants in the country. The company would like to leverage on its expertise in the engineering, procurement and construction (EPC) business and use the design ability of its subsidiary Simon Carves for working on nuclear power plants.

Manchester-based Simon Carves has around 3.5 million man-hours of nuclear work experience, according to Punj Lloyd. Areva has already signed an MoU with Nuclear Power Corporation of India Ltd to jointly set up two to six reactors (European Pressurised Reactor units of 1,650 MW each) in the country. Punj Lloyd is partnering the French company’s transmission and distribution division in several of its T&D projects.

Power demand at record high in Delhi

May 1, 2009. At 3,681 MW, the Capital recorded the highest demand of the season so far on account of the rising temperatures. Delhi will get 302 MW power from the central unallocated quota. Besides, power banking arrangements have been signed with Maharashtra, Madhya Pradesh, Rajasthan and Himachal Pradesh for an additional supply of 277 MW.

Powercuts had to be forced on the city , particularly in the South and the West, as Delhi fell short by over 300 MW. While distribution companies have been instructed to try and effect loadshedding on a one-hour rotational basis, some areas of South Delhi had to sweat it out for almost two hours. Overdrawing power from the Northern Eastern Western Grid has also been cited as a reason for the loadshedding in Delhi.

KSK Energy project in Rajasthan

April 30, 2009. KSK Energy Ventures Ltd has intimated to the stock exchange that it is poised to commence generation from its 135 MW VS Lignite project based in Rajasthan. Providing detailed project status to the exchanges, KSK Energy has said that the company is likely to commission all the four units of 135 MW each aggregating 540 MW at Wardha Power by March 2010. The company has stated that the necessary equipment for the project has arrived at the site in Rajasthan. However, there was some minor delay in securing visas for Chinese engineering team. Referring to the unit at Wardha, the company said that the project implementation is according to schedule.

India’s power production up 2.7 pc in March

April 30, 2009. India’s power generation grew by 2.7% in the year ended March 31, slower than the previous year, according to government data. India's power plants produced 723.6 billion units of electricity in the financial year that ended on March 31 as against 704.5bn units produced in the previous year. Electricity generation grew by 6.3% in the year 2007-08. Power companies sell electricity in units, each of which represents one kilowatt consumed in one hour, or the energy used when a 100-watt light bulb burns for 10 hours.

Scanty rainfall hits Assam power position

April 30, 2009. Rainless condition over a protracted period unusual during this pre-monsoon season, had a telling impact on the State power scenario. However, with the rains starting to pour in over the NE region since yesterday, the situation is expected to improve. Meanwhile, the Upper Assam Electricity Distribution Company Ltd (UAEDCL) has issued a notice informing the power consumers that the ‘Company is forced to restrict power supply due to low availability of power from the hydel power stations owing to inadequate rainfall and erratic power received from thermal power stations under NEEPCO’.

Transmission / Distribution / Trade

India has 12 pc power shortage, figure may get higher

May 5, 2009. This summer, which has already seen record high temperatures, will soon get hotter and more uncomfortable due to longer power outages. The limited addition of new power producing capacity, fall in hydropower generation in south India and higher demand for electricity in summer have already resulted in a severe power shortage across the country—and government officials say the situation will improve only after the onset of the monsoon rains. India has a 12% shortage in power during the peak hours between 5pm and 11pm, but experts say this number could be higher.

Power consumption dips after rain in Karnataka

May 4, 2009. Peak summer power consumption, which had reached a record high, is now dipping due to April showers that have reduced the demand for power, particularly in rural areas. The average consumption was 140 million units (mu) in the second week of April; it reduced to 120 mu by the third week and at one point was hovering between 110 and 115 mu. Consumption has come down as irrigation pumpsets in rural areas are drawing less power because of rain.

Siemens, Adani in Rs 1,400-cr deal

May 1, 2009. Adani Power said it has awarded a contract worth Rs 1,380 crore to Siemens group for transportation of power from its Mundra unit in Gujarat to Haryana. Siemens India has received a contract of Rs 720 crore, while the remaining Rs 660 crore was given to its German parent, Siemens. The Siemens group firms will install a 1,000-km bipolar 500-kilovolt high-voltage direct current transmission system of 2,500 mw.

Policy / Performance

Gas power projects yet to take off in Uttarakhand

May 5, 2009. Despite facing acute power shortage, the Uttarakhand government seems to have made no headway in its plans to tap alternative sources of energy, particularly in the gas sector, to meet the state’s growing power demand. Three years ago, the government had tried to rope in Gas Authority of India Limited (GAIL) to jointly examine various opportunities for natural gas and undertake extension of the national gas grid to Uttarakhand. State Infrastructure and Industrial Development Corporation of Uttarakhand Limited, a government enterprise, had signed a memorandum of understanding with GAIL to give a fillip to gas-based energy projects.

Siemens, BHEL to form JV for super critical turbines

May 4, 2009. Bharat Heavy Electricals Ltd. (BHEL) is planning to form a joint venture with Siemens for making critical and super critical steam turbines in India. The state-run power equipment major has a technology transfer agreement with Siemens and may convert it into a joint venture agreement.

Arunachal Hydel project in jeopardy- Govt move irks villagers

May 3, 2009. The 2,400MW Lower Siang hydel project has run into rough weather with villagers of Upper and East Siang districts of Arunachal Pradesh taking up cudgels against the state government’s move to go ahead with the project. Nearly 10,000 villagers of 19 villages of Upper and East Siang districts under the banner of Lower Siang Project Affected Peoples’ Action Committee are opposing the project.

R-Power may not get entire Sasan coal

May 2, 2009. Reliance Power, an Anil Dhirubhai Ambani Group (ADAG) company, may not get its full quota of coal for Chitrangi power project in Madhya Pradesh from its own captive mines attached with Sasan power project. The government is considering limit diversion of captive coal from Sasan to Chitrangi only to the extent of power being offered for sale through competitive bidding. The coal ministry has also communicated its decision to Sasan Power, the special purpose vehicle (SPV) implementing the 4,000 mw ultra mega power project in Madhya Pradesh.

When contacted, a Reliance Power official said that the move of the coal ministry was preliminary in nature. As per an EGoM decision last year, Reliance Power was allowed to use incremental coal from Sasan for its other power projects where power is sold through tariff-based competitive bidding. Annually, both the power projects being developed by Reliance Power are expected to consume 15-16 million tonne of coal each. As per the mining plan submitted by Reliance Power, the three captive coal blocks of Sasan —Moher, Moher Almori extension and Chhatrasal blocks — could produce up to 25-26 million tonnes of coal. This would mean at least 10 million tonne of coal would be surplus from these mines (Sasan to require 16 mt of coal annually).

The issue of diversion of coal has become contentious as Tata Power moved the court against the Centre’s decision citing the approval was contrary to the terms of the bid documents disclosed to all bidders in the bidding process for Sasan plant. This, thereby, amounted to changing tender conditions after the conclusion of the bidding process, it had alleged. The Delhi High Court on April 13, however, dismissed the petition filed by Tata Power. The company is now planning to file an appeal in the Supreme Court, challenging the judgement of the high court.

GMR ties up Rs 3,800 cr for power project

AprIL 30, 2009. Hyderabad-based GMR Infrastructure has tied up funds for its 1,050-mw power project at Kamalanga in Orissa, the second major power project to cross the key financial milestone in recent days after ADAG group-promoted Sasan power project achieved financial closure last week.

Plan panel proposes setting up of National Electricity Fund

April 30, 2009. The Planning Commission has proposed setting up a National Electricity Fund with a corpus of Rs 1,00,000-1,50,000 crore to finance development of power transmission and distribution (T&D) network by state utilities so as to reduce T&D losses. The idea behind setting up this fund is to reduce T&D losses in the next three years to 15 per cent by setting up new electricity transmission lines, transformers, replacing overloaded lines and using new technology. Chaturvedi is heading a panel which was set up to submit a report on modalities for the National Electricity Fund's operations. In a meeting held on Wednesday evening, the report was given final shape. State-run Power Finance Corp and Rural Electrification Corp would be the nodal agencies to finance state utilities. The agencies would raise around Rs 30,000-40,000 crore every year from the domestic market and financial institutions. The Government would help the agencies through interest subvention.

INTERNATIONAL

OIL & GAS

Upstream

Ecopetrol tests positive gas at Gibraltar, Colombia

May 5, 2009. Ecopetrol finished drilling the Gibraltar 3 well, located in the Siriri block in the Northeastern Region of Colombia. The Gibraltar well was drilled to delimit the Gibraltar gas field as well as to prove the existence of structures and reservoirs in the deeper zones of this field. The initial tests proved that Gibraltar 3 is a gas and condensate producing well within the upper thrust sheet of the Mirador formation (Gibraltar field), thus ratifying the results obtained from the drilling that took place at the Gibraltar 1 and 2 wells. In the tests conducted, the Gibraltar 3 well had natural gas production in the range of 28 and 30 million cubic feet of gas per day (mcfd), with a one inch well choke opening, and 54 degrees API hydrocarbon production of 530 barrels per day (bpd).

Iran to inagurate new rig to explore for more Caspian oil

May 4, 2009. Iran plans to launch a domestically-built 14,000 ton offshore platform in its territorial waters of the Caspian Sea to increase its oil output. Iranian Oil Minister Gholamhoseyn Nowzari says President Mahmud Ahmadinezhad is scheduled to inaugurate the Iran-Alborz semisubmersible drilling rig in "the coming weeks." After launching the $400 million platform, Nowzari said that Iran could explore oil reserves in the waters of the sea, down to a depth of about 1,000 meters.

After winning the international tender offered by the National Iranian Oil Company for the construction of the Iran-Alborz platform in 2002, the Sadra Group, with a 95 percent share, kicked off the project in a joint venture with the Swedish company GVA, which held a five percent share. Iran's Khazar Oil Company said in a 2008 statement that the first well will be drilled by the Iran-Alborz platform at the depth of 700 meters.

ConocoPhillips, Anadarko underscore new Alaskan discoveries

May 4, 2009. ConocoPhillips and Anadarko Petroleum Corporation announced the discovery and test production from two wells in the National Petroleum Reserve-Alaska: Pioneer 1 and Rendezvous 2. Pioneer 1 was tested in March of this year and Rendezvous 2 was tested in winter of 2008. Both are located in the Greater Mooses Tooth Unit, approximately 20 miles southwest of the Colville River Unit development on the North Slope of Alaska.

Test production rates for these wells ranged from about 500 barrels of oil per day to as high as 1,300 barrels of oil per day of high API gravity oil. Gas production rates averaged about 1.5 million cubic feet per day for each well.

Iran to develop Turkmen gas field

May 4, 2009. Tehran will develop Turkmenistan's Yolotan gas field, a senior Iranian oil official announced, adding that Iran will soon propose a draft contract to Ashgabat. Iran had requested a series of technical data and information to estimate the costs. In February, Iran signed a tentative agreement to develop the massive Yolotan-Osman gas field near eastern Turkmenistan.

Iran also sealed a deal to increase its annual purchases of Turkmen gas to 10 billion cubic meters (bcm), which amounts to one-fifth of what Russia buys from Turkmenistan. In addition, Iran has been discussing with Turkey the routing of Turkmen gas to Europe via the existing Iran-Turkey gas pipeline.

Admiral Bay resources snaps up producing Cherokee Basin assets

May 4, 2009. Cherokee Basin - ShilohAdmiral Bay Resources has acquired additional producing natural gas assets in the Kansas Cherokee Basin from an undisclosed private seller for approximately $2.0 million (US).

Based on available data and Admiral Bay analysis, the assets currently have gross sales of approximately 1.2 million cubic feet of gas per day (mmcf/d) and contain proved reserves of approximately 8.3 billion cubic feet of natural gas. Located in Wilson and Neosho counties, the Thayer (Neodesha) assets are centrally located among existing Admiral Bay operations.

Aztec drills 3rd successful natural gas well in Texas

May 4, 2009. Aztec Oil & Gas announced another successful gas well in its newest drilling partnership, the Aztec VIII A Oil & Gas LP. As with the previous two successful wells, this gas well is also located in Goliad County, Texas. The newest well, the West Powell #3, was drilled to a total depth of approximately 1,695 feet. The well encountered two Miocene gas sands: one at 1,662 feet (lower zone); and the other at 1,535 feet (upper zone).

The lower zone has seven feet of net gas sand and the upper zone has fifteen feet of net gas sand. The upper zone was the target zone, but the lower zone will be produced first and the upper zone will be completed and produced after the lower zone is fully production depleted.

Petrobras pumps first crude from Tupi field

May 1, 2009. Brazilian state-run energy giant Petrobras (PBR) celebrated May Day in style, pumping the first crude from the Western Hemisphere's largest oil discovery in 30 years. Petrobras CEO Jose Sergio Gabrielli and Mines and Energy Minister Edison Lobao officially started a 16-month test at the Tupi field in a ceremony aboard the BW "Cidade de Sao Mateus" floating production, storage and offloading vessel, the company said.

The event marked Brazil's official emergence as a nascent global oil power. In November 2007, Petrobras caused a stir in the international oil industry with the announcement of the Tupi discovery, estimated to hold recoverable reserves of between 5 billion and 8 billion barrels of oil equivalent. Tupi is expected to produce 100,000 barrels of crude daily and 4 million cubic meters of natural gas.

Chevron: Final Gorgon decision by year end

May 1, 2009. Chevron Corp. said it expects to make a final investment decision on its multi-billion-dollar Gorgon liquefied natural gas project at Barrow Island in Western Australia before the end of the year. Chevron recently won conditional approval from an Australian regulator for Gorgon.

The Environmental Protection Agency of Western Australia said that although it was still opposed to the building of the Gorgon liquefied natural gas facility on a nature reserve, the plan could pass with strict conditions. After a two-week public appeal process, the state government will decide whether to allow the project and on what conditions. The U.S. oil company, with partners Royal Dutch Shell PLC and Exxon Mobil Corp., wants to increase the size of Gorgon.

StatoilHydro makes small gas discovery at Canon prospect

April 30, 2009. A small gas condensate discovery has been made by StatoilHydro in the Canon prospect, about 11 kilometers west of the Veslefrikk field in the North Sea. The purpose of the exploration well was to prove petroleum in a fault block between the Huldra and Oseberg fields. The well tested two reservoir levels -- an upper one belonging to the Brent group and a deeper level in the Statfjord group.

Zapata energy added 1.2 mn boe of reserves in 2008

April 30, 2009. Zapata's 2008 capital program of $33.1 million resulted in Zapata adding 1.2 million boe of reserves, more than replacing its 2008 production. In 2008, $19.4 million was spent on drilling 27 (17.9 net) wells resulting in 12 (6.9 net) gas wells, seven (6.5 net) oil wells, one net abandoned well, two (2 net) standing wells and five (1.5 net) wells in progress at year end. The wells in progress at year end included Zapata's 100% owned deep test in the Gold Creek area.

China North East petroleum increases production by 93 pc

April 29, 2009. China North East Petroleum Holdings, a leading oil producing company in Northern China, announced preliminary oil production results for the first quarter of 2009. The Company's crude oil production in the first quarter of 2009 totaled 221,688 barrels, a 93% increase compared to 114,862 barrels in the first quarter of 2008. The total number of wells in production during the quarter was 247. The Company is planning to commence drilling additional wells in May 2009.

Arete industries to purchase producing O&G properties

April 29, 2009. Arete Industries signed a definitive agreement to purchase oil and gas properties in Wyoming, Colorado, Kansas, and Oklahoma from DNR Oil & Gas Company and Tindall Operating Company for cash and additional consideration. The wells being offered by DNR & Tindall total 243 wells, including 46 operating wells (PDP) and 197 PUDS (PUD), with a discounted reserve value of the proven & developed, and the proven & undeveloped of $38,000,000. The reserve value assumes a 15% discount and uses $42 per barrel oil and $5 per Mcf gas.

CNOOC increases production by 15 pc

April 29, 2009. CNOOC announced its total daily net production of 566,860 barrels of oil equivalent (BOE) for the first quarter of 2009, representing an increase of 15.0% year-on-year (YOY). Benefiting from the production contribution of Platform B of Penglai 19-3 Phase II, Xijiang 23-1 and Wenchang oilfields, the Company's production of crude oil and liquids amounted to 468,535 barrels per day, an increase of 19.7% YOY. During the quarter, the Company's net gas production reached 563 million cubic feet per day. Its net production overseas increased by 30.9% YOY to 31,481 barrels per day, mainly attributable to production from Northwest Shelf Project in Australia and OML 130 in Nigeria.

Downstream

SunTrust Sues televangelist over refinery project

May 4, 2009. Fallout from Pat Robertson's efforts to revive a mothballed California refinery in the late 1990s still lingers. SunTrust Banks Inc. is seeking more than $3.6 million from Robertson that it says relates to the aborted refinery project. In a suit filed in federal court in Norfolk, SunTrust said the Regent University chancellor and president refused to reimburse the bank for payments and litigation costs related to his acquisitions of an aging refinery and an oil terminal south of Los Angeles.

SunTrust said one of its predecessor banks, Richmond-based Crestar, provided a letter of credit to Golden West Refining Co. in Santa Fe Springs, Calif., in 1998 on behalf of the Robertson- controlled company Cenco Inc. Its standby letter of credit for $5 million was intended to protect Golden West against possible environmental obligations involving the Huntington Beach Marine Terminal and related assets that Cenco bought.

Shell Puget sound refinery contract talks continue

May 4, 2009. Shell Puget Sound Refinery remained in contract negotiations with the United Steelworkers. The union represents about 300 of the nearly 500 employees at the refinery in Anacortes. Their contract has expired, but the talks continued and United Steelworkers Local 12-591 President Joe Solomon indicated they were making progress. The last time workers at the refinery went on strike was 1984.

China aims to eliminate small refining units by 2011

May 4, 2009. China aims to eliminate all small refining facilities with an annual crude processing capacity of or below 1 million metric tons a year by 2011, the National Development and Reform Commission said. In addition, small refineries with 1 million-2 million tons of refining capacity will also be gradually closed down by then, it said in a statement. The government will also prohibit new refining projects for bitumen production or heavy oil processing, it added.

Marathon expands refinery

May 1, 2009. Marathon Oil Corp. began its $3.4 billion effort to make its oil refinery among the biggest in the nation. Expected to be completed later this year, the project will expand the 256,000-barrel-per-day refinery, now the country's 18th largest, to a facility with a crude oil processing capacity of 436,000 barrels per day, the fourth biggest. With it, output will jump from 12 million gallons per day of gasoline, diesel and other fuels to 19.5 million gallons per day. The expansion is moving forward despite an economic crisis that has prompted rivals including Motiva, Valero Energy, ConocoPhillips and even Marathon itself to delay or cancel refinery upgrades or additions.

Petrobras CEO Denies talks with Mitsui on refinery

April 30, 2009. Brazilian state-run oil company Petrobras (PBR) isn't in talks with Japan's Mitsui to finance a refinery project, according to the CEO. Press reports about talks between Mitsui and Petrobras are said to be "groundless." According to the reports, the companies were negotiating a financing package for a planned "premium" fuels refinery Petrobras wants to build in northeast Brazil's Ceara state. Petrobras wants to expand its refining capacity to 3.6 million barrels a day by 2015. The company processes about 1.9 million barrels daily.

Transportation / Trade

Oil pipe bypassing Hormuz to begin ops in 2011 - exec

May 5, 2009. Abu Dhabi's International Petroleum Investment Co., or IPIC, will start pumping oil through a new pipeline that will avoid the narrow Strait of Hormuz in 2011. The 360-kilometer line, known as Abu Dhabi Crude Oil Pipeline, or Adcop, will transport up to 1.5 million barrels a day of crude to Fujairah on the United Arab Emirates' east coast.

Abu Dhabi, the largest U.A.E. sheikdom, plans to build the pipeline to bypass the Strait, the 33-mile-wide channel through which Persian Gulf oil producers ship their crude exports. The crude oil will be sourced from the onshore Habshan field in Abu Dhabi. The emirate pumps 95% of the crude in the U.A.E., which is the third-largest oil producer in the Persian Gulf after Saudi Arabia and Iran.

Brazil to increase natural gas imports from Bolivia

May 4, 2009. Brazil will increase the amount of natural gas it imports from Bolivia later this month to bring on stream several thermoelectric power plants that had been inactive, Brazilian state-controlled energy company Petrobras said. According to Petrobras' director of gas and energy, Graca Foster, Brazilian imports of Bolivian gas once again will climb to 30 million cubic meters (1.06 billion cubic feet) per day - the maximum capacity of the gas pipeline linking the two countries - in approximately two weeks. At present, due to lower demand resulting from the global economic crisis and because heavy rainfall had allowed Brazil to produce more hydroelectricity, Brazilian imports of Bolivian gas have fallen to 24 million cubic meters per day.

3M spotlights corrosion protection products for O&G pipelines

May 4, 2009. 3M has introduced new Fusion Bonded Epoxy (FBE) technology 3M™ Scotchkote Coating 626-120 and Scotchkote Coating 626-140. The new products offer solutions to address new challenges and needs for high-temperature pipeline coatings in the oil and gas industry. These Scotchkote coatings protect oil and gas pipelines against corrosion while they operate at high temperatures. Scotchkote coating 626-120 can operate up to 115 degrees Celsius as a stand alone and up to 130 degrees Celsius when used in a three-layer system. Scotchkote coating 626-140 can withstand temperatures up to 135 degrees Celsius as a stand alone and up to 150 degrees Celsius as part of a three-layer system. Both Scotchkote coating120 and 140 products are a one-part, heat curable thermosetting epoxy powder designed as a stand alone or as the corrosion coating for a dual layer FBE and multilayer polyolefin system for the corrosion protection of pipe. These new FBE coatings have excellent thermal properties that protect natural gas and crude oil pipes against corrosion. 3M high-performance coatings offer a more reliable pipeline system, overcoming the challenges that energy companies face when hot pipelines cause coatings degradation leaving pipes vulnerable to corrosion.

TransCanada files prelim documents with FERC

May 4, 2009. TransCanada's Alaskan Pipeline PlanTransCanada Corp. made a preliminary filing April 23 with the Federal Energy Regulatory Commission in Washington, D.C., on its Alaska natural gas pipeline project. The step is procedural and will allow FERC staff to begin working with TransCanada as it further develops its project. The company had planned to make the preliminary filing after an initial open season planned in early 2010, Palmer said, but decided to do the filing earlier at the request of FERC staff. The rival producer-led Denali consortium led by BP and ConocoPhillips previously made a preliminary filing with FERC on its proposal for the Alaska pipeline.

Hot tap operation on North Sea pipeline

May 1, 2009. T.D. Williamson SA, a leading supplier of pipeline services and equipment, has performed a successful "hot tap" operation for Acergy. This subsea operation was carried out on a gas pipeline in the North Sea to facilitate tie-in of the Ettrick Field gas export pipeline operated by Nexen Petroleum U.K. Limited, in order that gas can be exported to the onshore gas plant north of Aberdeen, UK. What makes this hot tap project particularly impressive is that throughout the operation a prevailing pipeline operating pressure of 117 BarG was maintained, and that it was undertaken at approximately 94 meters sea depth. The entire hot tap operation was carried out safely, with no production downtime. While the offshore hot tap operation was completed in very little time, the planning and preparation contributed by T.D. Williamson to the project was extensive.

NGSA requests change to pipeline flow posting

May 1, 2009. In its official filing the Natural Gas Supply Association (NGSA) asked federal officials to consider adopting a "sole-feed" exclusion. The association's proposal would exempt major non-interstate natural gas pipelines from reporting if the pipeline has no, or very small volume end-users with total receipts of less than 15,000 MMBtu per day, or if the pipeline feeds into another major pipeline.

A sole-feed exclusion is consistent with the Commission's desire to establish rules that will improve transparency without unnecessary cost. Last November, FERC issued an order (number 720) which requires certain non-interstate and interstate natural gas pipelines to post design capacity and daily scheduled natural gas flow information. The rule also imposes posting requirements on interstate natural gas pipelines that provide no-notice service.

Financial crisis leads to suspension of Norway-Poland gas pipeline

April 30, 2009. Skanled, the company that planned to construct a gas pipeline from Norway to Poland, said the project has been suspended due to the worldwide financial crisis. Two major investors, Germany's EON and Norway's Petoro, which jointly own 40 percent of Skanled, announced they have pulled out from the project. The suspension of Skanled's construction dealt a hard blow to Poland's plans to diversify natural gas supplies and lessen the country's dependence on Russian gas and oil. The Polish oil and gas GNG company, which had a 15 percent share in Skanled, planned to transport 3 billion cubic meters of gas per year. That is about 18 percent of Poland's annual gas demand. The Skanled pipeline was expected to be completed by 2013 to transport Norwegian gas via Sweden and Denmark to Poland.

Policy / Performance

Venezuela may pass law to Seize oil services Cos

May 5, 2009. Venezuelan lawmakers are ready to support a law that would allow President Hugo Chavez to seize the assets of all oil-services companies, giving the state greater control over the industry. Members of Venezuela's National Assembly may approve in a first reading the law proposal that would declare of "public interest" all goods and services related to primary hydrocarbon activities, a needed step before expropriation. The congress has given the measure emergency priority, meaning a final approval would happen in 30 days. The law would include all oil services such as water, gas and steam injection technologies used to improve the recovery of crude oil from oil wells. It would also encompass the transport, and other maintenance activities performed in the oil-rich Maracaibo lake. Once the law is passed, Petroleos de Venezuela SA, or PdVSA, will be able to take possession of these activities.

Oil lingers above $54 on economic recovery hopes

May 4, 2009. Oil prices lingered above $54 a barrel in Asia as growing investor optimism about the global economy left crude poised to break out of a month-long trading range. Benchmark crude for June delivery was down 40 cents to $54.07 a barrel by midday in Singapore, in electronic trading on the New York Mercantile Exchange. Oil has traded near $50 for more than a month as the worst global slump in decades undermined crude demand. But recent positive economic signs have investors looking for a recovery. Pending U.S. home sales rose more than forecast and had their second straight monthly gain, while construction spending rose unexpectedly in March after five straight declines.

Norway awards 34 oil cos new production licenses in 20th round

May 1, 2009. The Ministry of Petroleum and Energy (MPE) has awarded new production licenses in the 20th licensing round on the Norwegian shelf. 34 companies received offers to participate in 21 new production licenses. The awards are in line with the Norwegian Petroleum Directorate's (NPD's) recommendation. The areas furthest to the west and north awarded in the Barents Sea are located in exploration provinces that have not previously been explored. The NPD believes that the information obtained from these blocks will be an important factor in further exploration of new areas. There is still a considerable potential for new discoveries in the Norwegian Sea. Several of the blocks are located in deep water in the Voring Basin.

Mexico's oil operations hum along despite swine flu

May 1, 2009. Mexico's state oil industry is still humming along despite a deadly flu outbreak that forced the government to declare a national holiday from May 1 to May 5 to combat contagion. Strategic activities as oil production are excluded from the government's work stoppage. Pemex continues to ramp up activity in the northern district, where the company is developing the Burgos natural gas basin and the Chicontepec oil region. Mexico pumps around 2.7 million barrels a day and, despite a sharp decline in output since 2004, the country is a main supplier of oil imports into the U.S. Earlier this week, Pemex announced preventative measures, such as shutting off the air conditioning in administrative offices and sending home any employees with flu symptoms, to keep staff healthy.

Kairiki Energy farms-out stake in SC 54

May 1, 2009. Kairiki Energy’s wholly owned subsidiary, Yilgarn Petroleum Philippines Pty Ltd, has executed a formal Farm-Out Agreement with Focus Oil and Gas, a wholly owned subsidiary of Focus Oil and Gas Pte Ltd (Focus), pursuant to its previously announced Letter Agreement. Focus is a private oil and gas investment company, headquartered in Singapore. The Farm-Out Agreement has been entered into on terms consistent with those previously announced.

Fuel crisis to end in Nigeria

April 30, 2009. The Nigerian National Petroleum Corp. (NNPC) has taken urgent steps to address the current fuel crisis, which has crippled economic activities nationwide, with the commencement of pumping of products, from the Atlas cove to other depots, which had been suspended since last week following an attack by vandals.

Putin, Tymoshenko hold talks to bury gas row

April 30, 2009. Russia and Ukraine have apparently buried the gas row into the past and are seeking to ease the strained ties, as Russian Prime Minister Vladimir Putin negotiated with his Ukrainian counterpart Yulia Tymoshenko. It is the first time for the two leaders to meet since they inked a deal to end the gas row that has plagued Europe in the depths of last winter. The original inter-governmental consultations between Russia and Ukraine were scheduled for early April. Yet angered by Kiev signing a joint declaration on its gas pipeline modernization excluding Moscow, Russia postponed the meeting in late March and suspended a 5-billion-U.S.-dollarIloan to Ukraine.

Senators push for Iran business sanctions

April 29, 2009. Nearly two dozen senators introduced legislation threatening punishment of foreign companies that provide gasoline and other refined petroleum products to Iran.

POWER

Generation

Egypt seeks Australian help with nuclear power plant

May 5, 2009. Reports out of Egypt said negotiations with tender winner, the US-based Bechtel Power, had fallen over and Worley Parsons engaged. If negotiations with WP are successful, the company would choose the technology and the site for the nuclear reactor. WP would also be responsible for the quality control of the project, train staff to operate the power plant and provide other technical services. WP was the under-bidder in a tender process to be a consultant on Egypt's plans to build its first nuclear power plant. The tender was conducted by Egypt's Ministry of Electricity and Energy.

Total invests in French nuclear plant

May 5, 2009. Total became the first major oil company to invest in the new wave of nuclear power projects with an agreement to buy a quarter of the share of GDF-Suez in a nuclear plant to be built at Penly in France. GDF-Suez granted a third of the Penly project by Francois Fillon, the French prime minister while Electricite de France half of the venture. The Franco-Belgian utility has promised to cede a quarter of its stake to its partner Total. The oil company last year announced its intention to move into the nuclear power arena, setting itself on a divergent course from its rivals, ExxonMobil, BP and Royal Dutch Shell which have chosen not to take part in the nuclear revival. Shell invested in the nuclear sector during its heyday in the 1970s but pulled out in 1980 after suffering a heavy loss. Lacking experience and nuclear technology, Total entered into a partnership with Areva, the French nuclear power engineer and GDF-Suez which owns Electrabel, a Belgian utility which operates seven nuclear plants.

Groups oppose proposed DTE Energy nuclear plant

May 5, 2009. DTE Energy Co. says it is addressing all the environmental concerns raised by environmental groups opposed to the utility's plans for a $10 billion nuclear plant. The Sierra Club, Beyond Nuclear and other groups told a three-judge panel of the Atomic Safety and Licensing Board that the Fermi 3 plant would add to air and water pollution, and would destroy wetlands and threatened or endangered species. Lawyers for DTE Energy said the utility will need federal permits to dredge or fill wetlands where protected species live, and will need state or federal permits for discharges into waterways.

New governor approves one coal-fired power plant for Kansas

May 4, 2009. In a stunning reversal from his predecessor, Gov. Mark Parkinson signed an agreement ending a two-year fight over plans to build coal-fired power plants in western Kansas. The compromise allows Sunflower Electric Power Corp. to build one 895-megawatt coal-fired power plant near Holcomb, instead of two 700-megawatt plants that were repeatedly blocked by Kathleen Sebelius when she was governor.

S Korean firm to build 30 MW hydro-power project in Nepal

May 2, 2009. The Nepal Electricity Authority has awarded a $47.5 million-contract to a South Korean firm for the construction of a 30 MW hydro-power project in Darchula district of western Nepal. The contract given to Korea Hydro and Nuclear Power also includes installation of 132 KV transmission lines which will link the proposed Chameliya hydro-power project with the national grid the NEA said. Manager of the Chameliya project K R Bhatta has signed an agreement with the representative of the Korean company. The China Gezhouba Group Corporation had already started the civil works for the project in January 2007. The deadline for completion of the whole project having a total cost of $99.9 million is 2011-12.

Transmission / Distribution / Trade

Allegheny Power to buy electricity cheap

May 5, 2009. If wholesale prices for electricity remain low, customers of Allegheny Power in the United States will be able to thank the recession for helping to keep a lid on bills when rate caps expire in about 20 months. Allegheny Energy Inc.'s power delivery unit is rushing to take advantage of wholesale prices that have fallen more than one-third since last July, by rescheduling to an earlier date and increasing the amount of power it buys at mandated power auctions. The auctions are required by the state Public Utility Commission under deregulation, which shifted electricity pricing to market-driven rates. Under the auction system, utilities like Allegheny Power buy power for their customers from generating companies who bid to be the supplier. The electricity will be delivered to Allegheny Power customers after rate caps expire on Dec. 31, 2010. "

Public comment sought on proposed Massachusetts power line upgrade

May 4, 2009. The public will get three chances to weigh in on the proposed $714 million power project designed to ensure adequate electricity in the region. Hearings in Agawam, Chicopee and Wilbraham will focus on the Greater Springfield Reliability Project. The project is part of a regional effort to improve power lines from Ludlow to Bloomfield, Conn. The aim is to upgrade 35 miles of transmission lines to improve the reliability and delivery of electrical power to the region in anticipation of increased demand. Twenty-three miles will be in Massachusetts and 12 in Connecticut.

Angola: Cabinet approves fourth phase electricity network

April 30, 2009. The Government approved in Luanda the draft contract for the fourth phase of the project of rehabilitation and expansion of the capital's electricity network. This was during a session of the Cabinet Council that also authorised the Luanda electricity company ( EDEL) to sign contracts with China National Machinery & Export Corporation, and with the consortium comprising Progest-Technical Projects, Consultant and Management, Lda and Engimais and by Engineering and Consultation Lda, for works and supervision. The project expects to install electricity in area such as Boavista, Viana-Vila, Viana Caop, Morro Bento, Zango, Ramiros and Benfica, including construction and installing of substations for those areas.

Policy / Performance

34,000 face loss of gas and electricity in USA

May 5, 2009. More than 34,000 National Grid customers in the USA could lose their gas heat or electricity if they don’t pay their past-due bills, the utility said. About a dozen customers, some bearing signs, went to the state Public Utilities Commission offices, to tell officials they are jobless and can’t find the cash. National Grid sent out termination notices last month. Last year the company sent more than 42,000 shutoff notices to electric customers in April and May.

New Zealand public favours light bulb ban

May 4, 2009. Plans to replace inefficient light bulbs in homes could have been kept, a public opinion survey suggests. A poll of 2851 New Zealanders that will be presented to the Emissions Trading Scheme select committee found the mandatory phase-out was supported by 45 per cent while 27 per cent than opposed it. A ban on incandescent light bulbs would save the country $500 million by 2020. New Zealand spends $660 million on electricity for lighting each year, generating 2.65 million tonnes of greenhouse gas emissions.

Russia to build floating Arctic nuclear stations

May 3, 2009. Russia is planning a fleet of floating and submersible nuclear power stations to exploit Arctic oil and gas reserves, causing widespread alarm among environmentalists. A prototype floating nuclear power station being constructed at the SevMash shipyard in Severodvinsk is due to be completed next year. Agreement to build a further four was reached between the Russian state nuclear corporation, Rosatom, and the northern Siberian republic of Yakutiya in February.

Tackling the power crisis in Bangladesh

May 3, 2009. The newly elected government continues to face a stern test in the manner in which it attempts to overcome the power deficit that is affecting not only the daily lives of the citizens but also economic development, trade, and prospects of food security. In a recent meeting, the Ministry of Power and Energy has mentioned that power generation has declined this year because of gas shortage. It has been pointed out that the country generates an average of 3,300 plus MW. Of this, the capital is being provided with on an average about 1,185 MW against a current demand of about 2,200 MW. It has also been suggested that after May 15 (when the irrigation requirements will ease) there will be an addition of about 150 MW through better co-ordination between DPDC, DESCO and the REB. The present government has reiterated more than once that they intend to overcome this power shortage.

Power tariff hike likely in Bangladesh

May 2, 2009. The Energy Regulatory Commission (ERC) may go for an increase in the power tariff by 2.63 per cent from September next. It has been learnt that the commission is mulling to introduce the system of 'lifeline tariff' and will not raise the tariff of the industry and agriculture categories as both of these are vulnerable to the impact of the current global recession, a highly placed source at ERC said.

Nigeria: 41 pc of generated electricity wasted

May 1, 2009. It is said that about 41 percent of the electricity generated in the country is wasted. The country needs about 8,500mw of electricity to meet President Umar Musa Yar' adua's target of 6000mw power supply by December this year. At the moment, about 2,800mw to 3,000mw of electricity is generated daily but only 1,800 mw reaches customers.

System-wide, there will be additional capacity required to meet specific demand of the different Zones to be able to wheel 6,000MW. Over 90 transmission projects are currently on-going at different locations across the country to evacuate and wheel the projected 6000MW by the end of 2009 and over 10,000MW by 2011.

Smart meters cut electricity use, help environment

May 1, 2009. President Barack Obama's economic stimulus package includes $4.5 billion to finance such smart grids nationwide. Florida Power & Light hopes that up to half of the $200 million it plans to spend on the Miami-Dade project could be financed through stimulus funds. Indeed, a future phase of the smart grid will warn consumers that the peak period, usually 3 to 6 p.m. in the summer, means more expensive power for the utility and that expense could be passed on to the customer. But that phase is still down the road.

Heating costs to drop, electricity to rise in Michigan

May 1, 2009. Michigan customers are using less electricity, gasoline and natural gas, which could lower utility bills in the months ahead. The Michigan Public Service Commission's summer energy appraisal released said that energy demand is expected to continue to decline throughout 2009. Gasoline prices should remain steady for the rest of the year. The price of natural gas is declining, as is demand, saving consumers money.

Electricity use also is expected to drop. But both Consumers Energy Co. and Detroit Edison have asked for rate increases so customers likely will see their electric bills rise. Demand for gasoline is expected to drop by 4 percent. Residents will use about 762 million fewer gallons of gasoline in 2009 than five years ago.

Nigeria’s PHCN seeks tariff increase

April 30, 2009. Power Holding Company of Nigeria (PHCN) has said with the significant increase in the exchange rate of the naira as well as gas prices, there was need to increase Multi Year Tariff Order (MYTO). Under MYTO, which took effect from July last year, the tariff per unit of electricity is N11.20 but to cushion the effect, the Federal Government decided to bear the extra cost of N5.20 over the N6.00 currently being paid by individual consumers.

Uganda: Govt. wants to cut electricity charges

April 30, 2009. The Government wants to bring down electricity prices by 50% in a bid to lower the cost of production and make power affordable for the masses. Uganda has the highest power tariffs in the East African region. Domestic consumers pay sh62 per unit for the first 15 units after which it goes up to sh426 per unit.

However, the power rates don't reflect the actual cost because the Government pays about sh174 per unit for every consumer. In Kenya, consumers pay sh38 for the first 50 units. The subsequent units are categorised into three groups and rank between sh166 and sh345 per unit.

Renewable Energy Trends

National

Investors force Suzlon to recast $500 mn FCCB terms

May 5, 2009. Suzlon Energy, the world’s fifth-largest wind turbine maker, will have to revise the terms of its $500-million foreign currency convertible bonds (FCCBs) maturing in October 2012, after a proposal to restructure them was rejected by investors. The Tulsi Tanti-controlled Suzlon is being forced to revise the terms on these bonds at a time of tight liquidity conditions and when it has to pay 175 million euros (nearly Rs 1,313 crore) this month to raise its stake in subsidiary REpower Systems.

Tata BP Solar ties up with ESB for heating system

May 3, 2009. Tata BP Solar India (TBS) has tied up with Dubai-based Eurostar Solar Energy (ESE) to meet the rising demand for solar thermal water heating systems in the region. TBS is a joint venture between Tata Power Company, a pioneer in the power sector and BP Solar one of the largest Solar Companies in the world. ESE, the newly launched group company of EUROSTAR Group, is an active proponent for renewable energy in the region offering expertise in the design, supply, installation, commissioning and after sales service of solar water heating systems (provided by TBS) and PV systems. With over 2.5 million liters day of systems already installed in India TBS can be considered to be a world leader in solar thermal technology, a joint statement released here on Sunday said.

DLF to hive off wind power business

May 2, 2009. The country’s largest real estate developer DLF said it will hive off wind power business, one of its non-core businesses, to a wholly-owned subsidiary. While declaring its financial results, regarding exiting from non-core assets, DLF on Thursday said: “Wind power has met with a good response from strategic partners wherein the due diligence of the assets is currently underway.” Besides, the company was contemplating making an exit from long gestation projects such as hotels. It had already withdrew from large township projects at Bidadi and Dankuni.

Auro Mira Energy in talks for third-party sale

May 2, 2009. The Chennai-based independent power generating company Auro Mira Energy Company Private Ltd is in talks with five companies for ‘third-party sale of power’ generated by its two plants in Tamil Nadu. The company commissioned its 10 MW biomass plant at T Kalupatty, about 40 km South of Madurai.

It already has 7.5 MW biomass plant in Pudukottai. With the Tamil Nadu Electricity Board permitting independent power companies for third-party sale, Auro Mira began capitalising the opportunity. It has signed third-party sale agreement with six companies including TVS Srichakra in Madurai and Lucas-TVS, Ascendas and Tata Consultancy in Chennai.

Cobol raises $30 mn from Pangea Fund

May 1, 2009. Solar power firm Cobol Technologies, owned by Deepak and Ratul Puri of Moser Baer, has raised about $30 million, or about Rs 151 crore, from Pangea Emerging Infrastructure Fund, in return for a minority stake. Cobol has raised the funds through the issue of fully convertible debentures (FCDs) to the Mauritius-based fund in three tranches. The FCDs are compulsorily convertible into equity shares by March 31, 2012.

As per the agreement, the number of equity shares to be issued to Pangea shall not exceed 49% stake in Cobol. Moser Baer CMD Deepak Puri and ED Ratul Puri own 50% each of the solar power firm. Cobol Technologies was incorporated in August 2007 as Shri Shyam Entertainment, and rechristened in December 2007. It operates in the areas of electricity generation and distribution and is currently setting up a 5 mw solar power project in Uttar Pradesh. This marks business expansion in the non-conventional power sector for Deepak Puri and Ratul Puri.

BEL may diversify into solar power generation

April 30, 2009. Bharat Electronics Ltd (BEL) has set its eyes on entering solar power generation business as part of its diversification plans. BEL, which recently signed a memorandum of understanding with Bharat Heavy Electricals Ltd (BHEL) to form a joint venture to set up a polycrystalline silicon manufacturing unit to tap the huge potential in the solar energy sector, is not averse to become a player in the energy production business. However, the plan is at a nascent stage and it is assessing the viability of the proposition. The two PSUs were scouting for technology partner for the venture, he added.

German cos scout for offshore renewable energy projects in India

April 30, 2009. E.ON Energy Ltd and Baard Energy from Niedersachsen State in Germany are exploring possibilities to set up offshore renewable energy projects in India, the Minister for Economics, Labour and Transport of Niedersachsen, Germany, Mr Phillipp Rosler, has said. At a meeting organised by Indo-German Chamber of Commerce, Mr Rosler, said the Niedersachsen has a strong foothold in offshore renewable energy projects — like solar and wind power — due to its long coastline. Niedersachsen has garnered expertise in offshore energy and would help India, which also has a long coast, in leveraging inherent potential.

IOC sets up windfarm in Gujarat

April 30, 2009. Indian Oil Corporation (IOC) has commissioned its first windfarm at Kandla in Gujarat, according to a report. The company has invested Rs 1.3bn in setting up a windfarm that generates 21 MW of power, according to a report. The report stated that company had awarded the contract for setting up of the windfarm to Pune-based Suzlon Energy, which would also be responsible for maintenance and operations for the duration of the contract.

Global

Poll shows wide support for renewable electricity standard in USA

May 5, 2009. The American Wind Energy Association (AWEA) released results of a new poll showing strong, deep bipartisan support for a national Renewable Electricity Standard (RES) requiring utilities to generate at least 25 percent of their electricity from renewable energy sources by 2025. The poll, conducted by Garin Hart Yang Research Group, found that 75 percent of voters favor the RES proposal requiring electric utility companies across the nation to generate at least 25 percent of their electricity through renewable energy sources by 2025, and that support is deep: a 53 percent majority strongly favors a national RES, dwarfing the 16 percent of voters who oppose such action.

GE to bring 2.5 MW wind turbine to North American market

May 5, 2009. Following its successful debut in Europe and Asia, GE Energy announced that its 2.5-MW wind turbine is coming to America. The 2.5xl, which is the latest evolution of the company's wind turbine technology, will be launched in North America in 2010.

More than 100 of the 2.5-MW machines already have been installed in seven countries and have compiled more than one million operating hours. GE has received more than one gigawatt of commitments over the next year and a half to provide the 2.5xl wind turbine for projects across Europe. The 2.5xl represents GE's most advanced wind turbine technology in terms of efficiency, reliability and grid connection capabilities.

Obama issues directive to expand biofuel access

May 5, 2009. President Barack Obama issued a presidential directive to Secretary of Agriculture instructing the department to aggressively accelerate the investment in and production of biofuels. Increasing renewable fuels will reduce dependence on foreign oil by more than 297 million barrels a year and reduce greenhouse gas emissions by an average of 160 million tons a year when fully phased in by 2022, according to U.S. officials.

The EPA would establish four categories of renewable fuels, some of which would be produced form new sources. To address lifecycle analysis, the EPA said they are soliciting peer reviewed, scientific feedback to ensure that the best science available is utilized prior to implementation.

EPA unveils plan for renewable fuels mandate

May 5, 2009. The U.S. Environmental Protection Agency is proposing its strategy for increasing the supply of renewable fuels, poised to reach 36 billion gallons by 2022, as mandated by the Energy Independence and Security Act of 2007. Increasing renewable fuels will reduce dependence of foreign oil by more than 297 million barrels a year and reduce greenhouse gas emissions by an average of 160 million tons a year when fully phased in by 2022.

Scotland ready to take lead in carbon capture technology

May 4, 2009. Scotland has the storage capacity, the natural resources, the technology and ambition to become Europe's leader in carbon capture and storage, says First Minister Alex Salmond. Key findings of a study on ‘Opportunities for CO2 Storage Around Scotland’, which was achieved by a collaborative partnership between the Scottish Government and partners from across the industry, research universities and institutes, conclude that Scotland has the ability to safely accommodate industrial emissions generated in Scotland and North East of England for the next 200 years.

Solar cell makers stake out turf in power plants

May 4, 2009. As power plants look to go green, Japan's solar cell panel developers are expanding their focus from residential applications to deployments on a grander scale, targeting 1-gigawatt-class production within a few years. Sanyo Electric Co. Ltd. and Nippon Oil Corp. have jointly launched Sanyo Eneos Solar to target the solar power plant market. Nippon Oil, for its part, is leveraging its business contacts to court developers of solar power plants in oil-producing regions such as the Middle East. Another developer pursing the power plant business is Sharp Corp., which has been producing thin-film solar cells for 160-MW annual output since October. Production output of 1 GW/year is expected by April 2010. Kaneka Corp. also started thin-film solar cell production last year. Manufacturing equipment company ULVAC, meanwhile, has delivered a turnkey system for thin-film solar cells to Taiwan's NexPower Technology. Some manufacturers are looking to sell system solutions for solar power plants. Among them is Toshiba, whose Transmission Distribution and Industrial Systems group established a Photovoltaic Systems Division in January to court large-scale solar power plant projects.

Generating energy from the Deep

April 29, 2009. Lockheed Martin is best known for building stealth fighters, satellites and other military equipment. But since late 2006 the company has taken on a different kind of enterprise — generating renewable power from the ocean. The technology is still being developed in the laboratory, but if it succeeds on a large scale, it could eventually become an important tool in the nation’s battle against global warming and dependency on foreign oil. Lockheed and a few other companies are pursuing ocean thermal energy conversion, which uses the difference in temperature between the ocean’s warm surface and its chilly depths to generate electricity.

Dear Reader,

You may have received complimentary copies of the ORF Energy News Monitor. Our objective in bringing out the newsletter is to provide a platform for focused debate on India’s energy future. You could be a partner in this effort by becoming a subscriber. You could also contribute recommendations for India’s energy future in the form of brief insightful articles.

We look forward to receiving your patronage and support.

ORF Centre for Resources Management

ORF ENERGY NEWS MONITOR

Subscription Form

Please fill in BLOCK LETTERS

Subscription rate slabs for Commercial entries, Research Institutes, Academics and Individuals will be provided on request. The subscription can be made for soft copy or for hard copy or for both. Selected ORF publications as well as advertising space in one issue of the ORF Energy News Monitor are offered as introductory free gifts for Commercial Sector only.

Yes! I/we would like to receive copies of the weekly ORF Energy News Monitor for a period of ______year(s). I/we shall be entitled to one hard copy along with the option of soft copies to a list of e-mail addresses provided by me/us for the period of subscription. I/we also note that I/we shall get select ORF publications brought out during the period of subscription free.

Name……………………………Address…………….………………………Telephone……………………Fax………………….E-mail…………………

Please find enclosed cheque/Bank Draft No.........................dated …………………drawn at New Delhi for Rs.........……….favouring ‘Observer Research Foundation’

Please fill in this form and mail it with your remittance to

ORF Centre for Resources Management

OBSERVER RESEARCH FOUNDATION

20 Rouse Avenue

New Delhi - 110 002

Phone +91.11.4352 0020 extn 2120 (Vinod Tomar)

Fax: +91.11.4352 0003

E-mail: [email protected]

Registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485

Published on behalf of Observer Research Foundation, 20 Rouse Avenue, New Delhi–110 002 and printed at Times Press, 910 Jatwara Street, Daryaganj, New Delhi–110 002.

Disclaimer: Information in this newsletter is for educational purposes only and has been compiled, adapted and edited from reliable sources. ORF does not accept any liability for errors therein. News material belongs to respective owners and is provided here for wider dissemination only. Sources will be provided on request.

Publisher: Baljit Kapoor Editor: Lydia Powell

Production team: Akhilesh Sati, Manish Vaid & Vinod Tomar

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.

PREV NEXT

Related Search Terms

ENERGY NEWS MONITOR

Published on Apr 29, 2009

India’s Changing Gas Scenario: The New Imperatives (part – V)

Regulation of the Natural Gas Sector

Background

Selection of PNGRB Provisions

Limitations of the Petroleum & Natural Gas Regulatory Bill

Issues for Regulation

Downstream

Policy / Performance

Generation

Policy / Performance

Related Search Terms

Publications

Reforming International Financial Institutions: Why Good Policies Matter More for Developing Countries

Economics and Finance | International Trade and Investment | International Financial Institutions

Apr 23, 2025

Energy News Monitor | Volume XXI, Issue 36

Energy | Oil, Gas and Renewables

Apr 23, 2025

Essay Series

Long-form

Progammes & Centres

Location

About ORF

Engage

People

Energy News Monitor |Volume V, Issue 46

Published on Apr 29, 2009

India’s Changing Gas Scenario: The New Imperatives (part – V)

Regulation of the Natural Gas Sector

Background

Selection of PNGRB Provisions

Limitations of the Petroleum & Natural Gas Regulatory Bill

Issues for Regulation

Downstream

Policy / Performance

Generation

Policy / Performance

Related Search Terms

Publications

Economics and Finance | International Trade and Investment | International Financial Institutions

Apr 23, 2025

Energy | Oil, Gas and Renewables

Apr 23, 2025