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Apr 2016
The coal industry is hitting back at the natural gas industry, claiming that the use of coal using high efficiency super critical technology can plug the emission advantage of gas based power plants
8A recent study has claimed that greenhouse emissions from super critical coal plants and gas based power stations are in fact at the same level.
8Gas based power generation does not have an advantage, the argument goes.
8The assumption includes methane leakages from the gas production and transportation systems used to produce gas based power.
8The study goes on to claim that raising the efficiency of coal based power generation is a sure way of bring down CO2 emissions.
8Examples are given of new super efficient coal based units in Japan and China in which emissions are well below stringent standards set by the European Union and US.
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8A recent study has claimed that greenhouse emissions from super critical coal plants and gas based power stations are in fact at the same level.
8Gas based power generation does not have an advantage, the argument goes.
8The assumption includes methane leakages from the gas production and transportation systems used to produce gas based power.
8The study goes on to claim that raising the efficiency of coal based power generation is a sure way of bring down CO2 emissions.
8Examples are given of new super efficient coal based units in Japan and China in which emissions are well below stringent standards set by the European Union and US.
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Pushed into a corner, GAIL is reported to be pushing for changes in its offtake agreement with Cheniere Energy for committed offtake of gas from the Sabine Pass LNG terminal.
8GAIL has two contracts in the US: One for 3.5 MMTPA with Sabine Pass terminal and the other for 2.3 MMTPA from the Cove Point terminal.
8The Indian public sector gas company has a 20-year deal with Sabine and it involves paying a fixed cost of $3/mmbtu and a gas cost pegged at 115% of the Henry Hub price.
8These kind of costs make GAIL's ex-ship break-even cost for LNG in Asia at anywhere between $7-8.mmbtu
8GAIL is reported to be claiming at these prices it is not possible to sell LNG, not just in India but elsewhere too.
8For one, GAIL wants the fixed cost element of $3/mmbtu to be pared down to just the cost of liquefaction alone.
8The Indian gas major is a tough bargainer and is trying to push the US company for a whole lot of other concessions. Cheinere Energy is reported to be receptive to some ideas given the massive global overhang of excess capacity but how far it will go remains a moot point.
8This will really be a test case as GAIL is seeking to renege on a written contract with a US company.
8The outcome is uncertain and will have grave implications for the Indian gas major.
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8GAIL has two contracts in the US: One for 3.5 MMTPA with Sabine Pass terminal and the other for 2.3 MMTPA from the Cove Point terminal.
8The Indian public sector gas company has a 20-year deal with Sabine and it involves paying a fixed cost of $3/mmbtu and a gas cost pegged at 115% of the Henry Hub price.
8These kind of costs make GAIL's ex-ship break-even cost for LNG in Asia at anywhere between $7-8.mmbtu
8GAIL is reported to be claiming at these prices it is not possible to sell LNG, not just in India but elsewhere too.
8For one, GAIL wants the fixed cost element of $3/mmbtu to be pared down to just the cost of liquefaction alone.
8The Indian gas major is a tough bargainer and is trying to push the US company for a whole lot of other concessions. Cheinere Energy is reported to be receptive to some ideas given the massive global overhang of excess capacity but how far it will go remains a moot point.
8This will really be a test case as GAIL is seeking to renege on a written contract with a US company.
8The outcome is uncertain and will have grave implications for the Indian gas major.
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The following trends are expected to be seen in the LNG markets in 2016 and beyond:
-- Increased demand from buyers for locational and lifting flexibility
-- Spot pricing embedded in long-term contracts
-- Increase in spot market volumes, as buyers seek to diversify portfolios away from long-term contracts
-- Push to reduced pricing formulas and inclusion of non-oil/alternate fuel pricing (e.g., Henry Hub)
-- Burgeoning growth of hedgeable instruments and derivative markets
-- Evolution of new derivative instruments (such as, location swaps)
-- Anticipated increase in uncontracted volumes as many long-term contracts expire between 2016 and 2020
-- Panama Canal expansion will reduce journey time from US to Asia by 11 days
-- Increased risk-taking from sellers to ensure volumes are placed
-- Selling LNG to new buyers with reduced creditworthiness, requiring credit enhancement or taking on additional risk appetite.
-- Russian oversupply in terms of the threat of Russia swamping the European market with gas to contain US LNG exports.
8The above factors will herald a new era of portfolio optimization considerations. Sellers will need to secure value in the medium to longer term by extending existing contracts and doing business with new, more risky counterparties (while relaxing stringent credit requirements in the process). Buyers will look to widen the scope of term contracts, seeking both spot and shorter-term strip deals.
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-- Increased demand from buyers for locational and lifting flexibility
-- Spot pricing embedded in long-term contracts
-- Increase in spot market volumes, as buyers seek to diversify portfolios away from long-term contracts
-- Push to reduced pricing formulas and inclusion of non-oil/alternate fuel pricing (e.g., Henry Hub)
-- Burgeoning growth of hedgeable instruments and derivative markets
-- Evolution of new derivative instruments (such as, location swaps)
-- Anticipated increase in uncontracted volumes as many long-term contracts expire between 2016 and 2020
-- Panama Canal expansion will reduce journey time from US to Asia by 11 days
-- Increased risk-taking from sellers to ensure volumes are placed
-- Selling LNG to new buyers with reduced creditworthiness, requiring credit enhancement or taking on additional risk appetite.
-- Russian oversupply in terms of the threat of Russia swamping the European market with gas to contain US LNG exports.
8The above factors will herald a new era of portfolio optimization considerations. Sellers will need to secure value in the medium to longer term by extending existing contracts and doing business with new, more risky counterparties (while relaxing stringent credit requirements in the process). Buyers will look to widen the scope of term contracts, seeking both spot and shorter-term strip deals.
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Rapid changes in LNG delivery models will be a requirement for supplier to survive.
8Science and engineering to create small scale LNG plants, shipments and applications will have to be developed to grow the FSRU market.
8There has already been significant advancements in driving down the cost of small scale liquefaction and regasification units, but this is still relatively expensive.
8Small scale liquefaction and regasification will add flexibility to how LNG can be deployed.
8Engineering that supports the growth of LNG applications in trucking and marine segments will see more emphasis.
8Of late, engineering design in the U.S. for large long haul trucks has seen breakthroughs.
8Some long haul trucks can now travel 600 miles using LNG without refuelling.
8Its use in heavy haul trucks was thought possible three-four years ago.
8More such innovations can help increase the use of gas and in turn the demand for gas.
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8Science and engineering to create small scale LNG plants, shipments and applications will have to be developed to grow the FSRU market.
8There has already been significant advancements in driving down the cost of small scale liquefaction and regasification units, but this is still relatively expensive.
8Small scale liquefaction and regasification will add flexibility to how LNG can be deployed.
8Engineering that supports the growth of LNG applications in trucking and marine segments will see more emphasis.
8Of late, engineering design in the U.S. for large long haul trucks has seen breakthroughs.
8Some long haul trucks can now travel 600 miles using LNG without refuelling.
8Its use in heavy haul trucks was thought possible three-four years ago.
8More such innovations can help increase the use of gas and in turn the demand for gas.
Click here for more information. Details
The future seems to be very troubled for suppliers of LNG.
8Demand has to be tapped in newer countries
8The demand base has to be expanded to include new customer segments and applications (eg. industrial, city gas, transport, marine).
8In addition to the new markets, there is an opportunity to grow these segments even in large markets like Japan and South Korea where LNG demand for power generation is declining.
8Producers and marketers of LNG will have to wade in and support market and infrastructure development in newer countries as many of them will not have the experience to bring together the natural gas value chain.
8Already over 53 MMTPA LNG export capacity is under construction in the US and another 27.9 MMTPA is in pre-FID stage.
8Much of this volume is being brought on-stream by non-traditional players with a large trading emphasis,
8The LNG volume that will be available from the U.S., coupled with the excess supply from elewhere, will drive a bias towards trading as owners of LNG compete for buyers and opportunities.
8As many large long-term natural gas contracts expire, LNG buyers may choose to lock-in a much smaller percentage into long-term contracts. In addition, there is the question of whether the market will move more quickly than expected from oil-linked (relatively attractive in this low oil price environment) to Henry Hub (or other gas hub) linked contracts.
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8Demand has to be tapped in newer countries
8The demand base has to be expanded to include new customer segments and applications (eg. industrial, city gas, transport, marine).
8In addition to the new markets, there is an opportunity to grow these segments even in large markets like Japan and South Korea where LNG demand for power generation is declining.
8Producers and marketers of LNG will have to wade in and support market and infrastructure development in newer countries as many of them will not have the experience to bring together the natural gas value chain.
8Already over 53 MMTPA LNG export capacity is under construction in the US and another 27.9 MMTPA is in pre-FID stage.
8Much of this volume is being brought on-stream by non-traditional players with a large trading emphasis,
8The LNG volume that will be available from the U.S., coupled with the excess supply from elewhere, will drive a bias towards trading as owners of LNG compete for buyers and opportunities.
8As many large long-term natural gas contracts expire, LNG buyers may choose to lock-in a much smaller percentage into long-term contracts. In addition, there is the question of whether the market will move more quickly than expected from oil-linked (relatively attractive in this low oil price environment) to Henry Hub (or other gas hub) linked contracts.
Click here for more information. Details
The following worse case scenario is possible by the year 2030 for the LNG industry.
8It is assumed that Japan hits its nuclear and energy efficiency targets in 2030
8South Korea's demand stays flat
8China's natural gas demand slows so that it reaches 300 bcm figure closer to 2030 than 2020 while domestic supply and pipeline gas capacity grows.
8In India, only the FSRUs planned for 2020 are developed by 2030.
8In the 2030 demand estimation, the share of these four countries falls from 54 per cent of the global market to ~30 per cent.
8Some of the slag is likely to be picked up by other countries around the world but not amounting to enough.
8In the 2030 worst case, subdued demand could reduce the size of the LNG market to 382 MMT instead of the projected 500 MMT.
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8It is assumed that Japan hits its nuclear and energy efficiency targets in 2030
8South Korea's demand stays flat
8China's natural gas demand slows so that it reaches 300 bcm figure closer to 2030 than 2020 while domestic supply and pipeline gas capacity grows.
8In India, only the FSRUs planned for 2020 are developed by 2030.
8In the 2030 demand estimation, the share of these four countries falls from 54 per cent of the global market to ~30 per cent.
8Some of the slag is likely to be picked up by other countries around the world but not amounting to enough.
8In the 2030 worst case, subdued demand could reduce the size of the LNG market to 382 MMT instead of the projected 500 MMT.
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China will continue to increase its gas consumption in the coming years but its appetite is not going to be met via the LNG route.
8The country will remain the highest growth market globally for natural gas but not necessarily for LNG.
8In 2014, China imported 20 MMT (27 bcm) of LNG. In 2014, natural gas demand was 5.5 per cent of primary energy mix (148 mt or ~200 bcm), 70 per cent of which was catered to by domestic gas supply, 16 per cent through pipeline imports, 14 per cent via LNG imports.
8Natural gas demand is expected to grow upto 222 mt or ~300 bcm by 2020.
8However, the current plan is for a significant portion of this demand to be met domestically, from conventional and unconventional sources, and through gas brought in via pipelines from Siberia in Russia.
8The construction of the Siberian pipeline (38 bcm) will also have a significant impact on how much LNG is imported. If all of the pipelines under construction in China through 2018 are fully operational by 2020, LNG imports for the 2020 may remain at 2014 volumes or less, depending on domestic natural gas production.
8Finally, there is also the fact that Chinese GDP growth is slowing down , impacting energy demand and import of LNG.
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8The country will remain the highest growth market globally for natural gas but not necessarily for LNG.
8In 2014, China imported 20 MMT (27 bcm) of LNG. In 2014, natural gas demand was 5.5 per cent of primary energy mix (148 mt or ~200 bcm), 70 per cent of which was catered to by domestic gas supply, 16 per cent through pipeline imports, 14 per cent via LNG imports.
8Natural gas demand is expected to grow upto 222 mt or ~300 bcm by 2020.
8However, the current plan is for a significant portion of this demand to be met domestically, from conventional and unconventional sources, and through gas brought in via pipelines from Siberia in Russia.
8The construction of the Siberian pipeline (38 bcm) will also have a significant impact on how much LNG is imported. If all of the pipelines under construction in China through 2018 are fully operational by 2020, LNG imports for the 2020 may remain at 2014 volumes or less, depending on domestic natural gas production.
8Finally, there is also the fact that Chinese GDP growth is slowing down , impacting energy demand and import of LNG.
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The global LNG market is in the midst of a massive crash from which it is unlikely to recover in the next 15 years.
8The crash has been brought about by an over supply of LNG and a unanticipated cut back in demand in the main markets of Japan, South Korea and China.
8The situation looks grim as LNG demand is projected to fall rather then rise in these countries as alternative energy sources -- such as nuclear, solar and even coal -- squeeze out the appetite for gas.
8New markets are emerging in countries around the world but they may not fully make up for the slowdown in demand among the big three buyers.
8It is now being projected that demand may not pick up enough for prices to recover above the $4/mmbtu mark well into the foreseeable future.
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8The crash has been brought about by an over supply of LNG and a unanticipated cut back in demand in the main markets of Japan, South Korea and China.
8The situation looks grim as LNG demand is projected to fall rather then rise in these countries as alternative energy sources -- such as nuclear, solar and even coal -- squeeze out the appetite for gas.
8New markets are emerging in countries around the world but they may not fully make up for the slowdown in demand among the big three buyers.
8It is now being projected that demand may not pick up enough for prices to recover above the $4/mmbtu mark well into the foreseeable future.
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The Korean market too is of overwhelming importance in driving global LNG demand and prices and this market is slowing down.
8The country imports 97% of its energy resources, and the Koreans have been careful in planning their future energy needs. In 2014, South Korea imported 38 MMT of LNG and was the second largest importer of LNG globally.
8In 2015, natural gas demand fell more than was expected in South Korea. Use of natural gas in generation decreased in the first half of the year due to increasing use of nuclear or coal resources for generation.
8Across all consumption sectors, South Korea’s use of LNG is expected to decline as part of total natural gas consumption.
8A detailed analysis now shows that the use of coal, nuclear and even wind power will be cheaper than using LNG.
8New natural gas power plants have come online between 2009 to 2013, but utilization has so far been low.
8Therefore, no new power plants running on natural gas are expected to be built in the near future.
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8The country imports 97% of its energy resources, and the Koreans have been careful in planning their future energy needs. In 2014, South Korea imported 38 MMT of LNG and was the second largest importer of LNG globally.
8In 2015, natural gas demand fell more than was expected in South Korea. Use of natural gas in generation decreased in the first half of the year due to increasing use of nuclear or coal resources for generation.
8Across all consumption sectors, South Korea’s use of LNG is expected to decline as part of total natural gas consumption.
8A detailed analysis now shows that the use of coal, nuclear and even wind power will be cheaper than using LNG.
8New natural gas power plants have come online between 2009 to 2013, but utilization has so far been low.
8Therefore, no new power plants running on natural gas are expected to be built in the near future.
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All eyes are now on RIL's next move with its KG Basin discoveries. The company is still in the process of investigating prospects. A final decision will be taken after design changes and discussions with suppliers.
8There is one point of view that deepwater gas resources are price uncompetitive to other more cheaply available gas resources. In an global over supply situation, a high cost resource can only be exploited if price protection is given and not otherwise.
8For Mukesh Ambani too, the big question will be whether it is profitable to pour money into the KG Basin or spend it instead in his 4G or petrochemical businesses, both of which have huge growth potential.
8Ambani will have his arms full fending off competition both in his data transmission and petrochemical arms. Massive investments by countries such as Saudi Arabia and others in the Gulf as well as in China have brought in cut throat competition into the petrochemical business and this segment will need large deployment of capex.
8Then again, the 4G space too has heavy weight competitors. By the time 4G is fully deployed, the more ubiquitous 5G technology is likely to take root, forcing more investments in upgrades.
8The final call on taking an investment decision will depend on whether deployment of fund in deepwater gas will enlist a better return than in other business segments.
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8There is one point of view that deepwater gas resources are price uncompetitive to other more cheaply available gas resources. In an global over supply situation, a high cost resource can only be exploited if price protection is given and not otherwise.
8For Mukesh Ambani too, the big question will be whether it is profitable to pour money into the KG Basin or spend it instead in his 4G or petrochemical businesses, both of which have huge growth potential.
8Ambani will have his arms full fending off competition both in his data transmission and petrochemical arms. Massive investments by countries such as Saudi Arabia and others in the Gulf as well as in China have brought in cut throat competition into the petrochemical business and this segment will need large deployment of capex.
8Then again, the 4G space too has heavy weight competitors. By the time 4G is fully deployed, the more ubiquitous 5G technology is likely to take root, forcing more investments in upgrades.
8The final call on taking an investment decision will depend on whether deployment of fund in deepwater gas will enlist a better return than in other business segments.
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Now that it is clearly established that spot LNG price will hover at $4/mmbtu or even less well into the foreseeable future, perhaps going up to 2030, does it make economic sense to tap India's deepwater gas discoveries?
8ONGC has made it clear that it elicits a handsome post tax return of 15% at a gas price of $6.5/mmbtu in its KG-DWN-98/2 block.
8How does the sensitivity analysis pan out when the price is reduced by another $1.5-2/mmbtu?
8No buyer of gas in India will be willing to take domestic gas if he has the alternative of sourcing it cheaper. So, in effect, ONGC will have to compete with the delivered gas price of spot LNG in India.
8Already, ONGC has done significant design changes while also pushing equipment and service providers to bring down the cost of the project from Rs 53,000 crore to Rs 34,000 crore.
8Further cost reductions are still possible but not by too much.
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8ONGC has made it clear that it elicits a handsome post tax return of 15% at a gas price of $6.5/mmbtu in its KG-DWN-98/2 block.
8How does the sensitivity analysis pan out when the price is reduced by another $1.5-2/mmbtu?
8No buyer of gas in India will be willing to take domestic gas if he has the alternative of sourcing it cheaper. So, in effect, ONGC will have to compete with the delivered gas price of spot LNG in India.
8Already, ONGC has done significant design changes while also pushing equipment and service providers to bring down the cost of the project from Rs 53,000 crore to Rs 34,000 crore.
8Further cost reductions are still possible but not by too much.
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The first LNG cargo from the gigantic Sabine Pass liquefaction terminal in the US -- with which GAIL has entered into a 20-year take or pay arrangement -- has been shipped recently.
8The completion of Train-1& 2 is expected later in 2016 when full shipments can start taking place.
8GAIL has committed to pay a massive $584 million per year as fixed annual fees to buy 182,500,000 mmbtu of LNG.
8The fixed fees come to $3/mmbtu and the LNG cost has been pegged at 115% of the Henry Hub price.
8But the first charge on LNG cargoes from Trains 1 & 2 will not devolve on GAIL but on the BG Group
8GAIL's contract only begins when Train 4 is commissioned and that is going to be in March, 2018.
8So there is a lot of time still available for the two parties to arrive at an amicable settlement.
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8The completion of Train-1& 2 is expected later in 2016 when full shipments can start taking place.
8GAIL has committed to pay a massive $584 million per year as fixed annual fees to buy 182,500,000 mmbtu of LNG.
8The fixed fees come to $3/mmbtu and the LNG cost has been pegged at 115% of the Henry Hub price.
8But the first charge on LNG cargoes from Trains 1 & 2 will not devolve on GAIL but on the BG Group
8GAIL's contract only begins when Train 4 is commissioned and that is going to be in March, 2018.
8So there is a lot of time still available for the two parties to arrive at an amicable settlement.
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It is reliably learnt that Petronet LNG Ltd (PLL) is trying to push a harder bargain with Gorgon Exxon-Mobil against the contract for supply of 1.44 MMTPA of LNG from its Gorgon venture in Australia.
8The pricing formula with Gorgon is: FOB = 14.5% *JCC.
8Taking advantage of the buyers market, and keeping in mind the fact that the Kochi terminal is not in a position to take LNG supply due to evacuation bottlenecks, PLL has thrown in a whole range of options before Exxon Mobil for offtake of gas.
8An entire array of options -- including a reduction in the price slope but not just confined to that -- are being considered and thrown at Exxon Mobil for consideration.
8Among the options that PLL islooking at and sounding Exxon-Mobil with are:
-- Pricing flexibility, including spot pricing
-- Volume flexibility
-- Broader Force Majeure provisions
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8The pricing formula with Gorgon is: FOB = 14.5% *JCC.
8Taking advantage of the buyers market, and keeping in mind the fact that the Kochi terminal is not in a position to take LNG supply due to evacuation bottlenecks, PLL has thrown in a whole range of options before Exxon Mobil for offtake of gas.
8An entire array of options -- including a reduction in the price slope but not just confined to that -- are being considered and thrown at Exxon Mobil for consideration.
8Among the options that PLL islooking at and sounding Exxon-Mobil with are:
-- Pricing flexibility, including spot pricing
-- Volume flexibility
-- Broader Force Majeure provisions
Click here for more information. Details
LNG suppliers will now have to prepare for fewer locked-in long-term contracts to guarantee supply.
8Buyers are likely to be much more aggressive, seeking more favorable options.
The options could include
-- Price reductions and reopening of signed and sealed contracts
-- Location optionality
-- Volume flexibility
-- Alternative pricing mechanisms
-- Broader Force Majeure provisions
-- Contributions to onshore delivery fees.
For example, volume flexibility is being sought in the following forms :
-- Upward and Downward Quantity Tolerance (UQT and DQT)
-- Cargo cancellation rights
-- Back-end “ramp down” rights and call option structures
-- Seasonal flexibility.
8All these elements are likely to add new complexity to risk assessment and contracting for buyers and sellers.
Click here for more information. Details
8Buyers are likely to be much more aggressive, seeking more favorable options.
The options could include
-- Price reductions and reopening of signed and sealed contracts
-- Location optionality
-- Volume flexibility
-- Alternative pricing mechanisms
-- Broader Force Majeure provisions
-- Contributions to onshore delivery fees.
For example, volume flexibility is being sought in the following forms :
-- Upward and Downward Quantity Tolerance (UQT and DQT)
-- Cargo cancellation rights
-- Back-end “ramp down” rights and call option structures
-- Seasonal flexibility.
8All these elements are likely to add new complexity to risk assessment and contracting for buyers and sellers.
Click here for more information. Details
With slowing demand across the three major LNG markets, the onus falls on India to make up for the shortfall.
8But that is unlikely to happen. There is skepticism globally about India's ability to absorb a large quantity of LNG due to slowing demand and bad infrastructure
8There is no doubt that India could be the largest growing market for LNG. India imported 19 bcm of LNG in 2014, but the government forecast that demand will triple by 2020 has been found to be too optimistic.
8Data shows that natural gas use has not picked up speed in the past four years.
8For reference purposes, the website carries here details of around 60 MMTPA of fresh capacity that is coming up.
8While there is no doubt India’s LNG imports will grow, it is unlikely to be sufficient for all LNG gasification projects to go ahead.
8There is now a projection that only some FSRU based LNG capacity will be created by 2020.
8Then again, cost competitiveness of LNG to competing liquid fuels and coal will be another hurdle to growth in demand, as also the ability of the country to build a pipeline grid.
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8But that is unlikely to happen. There is skepticism globally about India's ability to absorb a large quantity of LNG due to slowing demand and bad infrastructure
8There is no doubt that India could be the largest growing market for LNG. India imported 19 bcm of LNG in 2014, but the government forecast that demand will triple by 2020 has been found to be too optimistic.
8Data shows that natural gas use has not picked up speed in the past four years.
8For reference purposes, the website carries here details of around 60 MMTPA of fresh capacity that is coming up.
8While there is no doubt India’s LNG imports will grow, it is unlikely to be sufficient for all LNG gasification projects to go ahead.
8There is now a projection that only some FSRU based LNG capacity will be created by 2020.
8Then again, cost competitiveness of LNG to competing liquid fuels and coal will be another hurdle to growth in demand, as also the ability of the country to build a pipeline grid.
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Gloomy data is coming in from Japan to begin with.
8Recent announcements by the Japanese Ministry of Economy, Trade and Industry (METI) indicate that the country’s natural gas consumption will continue to decline past 2020 and settle at 84 bcm by 2030. This is 32 per cent less than the 123 bcm (89 mt) of LNG imported in 2014.
8This is largely the result of continued increases in energy efficiency and the restarting of Japan's uclear power stations.
8Unless there is a breakthrough in transportation or other potential new demand sources, offtake of LNG will continue to decline.
8Since developments in Japan will have a direct impact on LNG demand-supply and prices with wide ranging implications for India, the website carries here a detailed analysis of the Japanese gas market under different scenarios involving restart of nuclear power plants, use of solar energy and gains in energy efficiency.
8The fall in Japanese demand will have a wringing effect on the global LNG energy industry.
Click here for more information. Details
8Recent announcements by the Japanese Ministry of Economy, Trade and Industry (METI) indicate that the country’s natural gas consumption will continue to decline past 2020 and settle at 84 bcm by 2030. This is 32 per cent less than the 123 bcm (89 mt) of LNG imported in 2014.
8This is largely the result of continued increases in energy efficiency and the restarting of Japan's uclear power stations.
8Unless there is a breakthrough in transportation or other potential new demand sources, offtake of LNG will continue to decline.
8Since developments in Japan will have a direct impact on LNG demand-supply and prices with wide ranging implications for India, the website carries here a detailed analysis of the Japanese gas market under different scenarios involving restart of nuclear power plants, use of solar energy and gains in energy efficiency.
8The fall in Japanese demand will have a wringing effect on the global LNG energy industry.
Click here for more information. Details
The PNGRB has effected a list of changes in nomenclature and clauses in the City Gas Distribution (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks).
8Clarifications have been issued on what constitutes network tariff and compression charge.
Then again, a bidding entity can be registered as a company even within six months of being declared a successful bidder.
8Also, the fresh amendment requires a new entity to bid for the tariff charge for each year of the economic life of the project but the variation in unit network tariff between any two consecutive years should not be more than ten per cent.
8Further, the volume of natural gas supply will have be equal to at least fifty per cent of the volumes considered in the quoted network tariff bid for each year of the exclusivity period allowed for exemption from the purview of common carrier or contract carrier under the Petroleum and Natural GasRegulatory Board (Exclusivity for City or Local Natural Gas Distribution Networks) Regulations, 2008.
8The authorized entity will be able to recover the network tariff and the compression charge for CNG separately from an entity accessing the CGD network through an invoice without any premium or discount on a non-discriminatory basis.
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8Clarifications have been issued on what constitutes network tariff and compression charge.
Then again, a bidding entity can be registered as a company even within six months of being declared a successful bidder.
8Also, the fresh amendment requires a new entity to bid for the tariff charge for each year of the economic life of the project but the variation in unit network tariff between any two consecutive years should not be more than ten per cent.
8Further, the volume of natural gas supply will have be equal to at least fifty per cent of the volumes considered in the quoted network tariff bid for each year of the exclusivity period allowed for exemption from the purview of common carrier or contract carrier under the Petroleum and Natural GasRegulatory Board (Exclusivity for City or Local Natural Gas Distribution Networks) Regulations, 2008.
8The authorized entity will be able to recover the network tariff and the compression charge for CNG separately from an entity accessing the CGD network through an invoice without any premium or discount on a non-discriminatory basis.
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The Great Eastern Shipping Company Ltd. (G E Shipping) took delivery of a new medium range product tanker “Jag Punit” of about 49,700 dwt.
8The company had contracted to buy the ship in December 2012.
8The vessel is built at STX Offshore & Shipbuilding Co. Ltd., Jinhae, Korea.
8With the inclusion of the vessel, the Company’s current fleet stands at 32 vessels, comprising 23 tankers (8 crude carriers, 14 product tankers, 1 LPG carrier) and 9 dry bulk carriers (4 Kamsarmax, 5 Supramax) with an average age of 10.4 years aggregating 2.5 mn dwt.
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8The company had contracted to buy the ship in December 2012.
8The vessel is built at STX Offshore & Shipbuilding Co. Ltd., Jinhae, Korea.
8With the inclusion of the vessel, the Company’s current fleet stands at 32 vessels, comprising 23 tankers (8 crude carriers, 14 product tankers, 1 LPG carrier) and 9 dry bulk carriers (4 Kamsarmax, 5 Supramax) with an average age of 10.4 years aggregating 2.5 mn dwt.
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Pan India is planning to spend Rs 53 crore in drilling four exploratory wells in its block CB-ONN-2010/5 in the Patan district in Gujarat.
8Water based mud drilling work will be done up to a depth of 3000 metres.
8The outlay also includes seismic survey work.
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Details
8Water based mud drilling work will be done up to a depth of 3000 metres.
8The outlay also includes seismic survey work.
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Details
ONGC is planning to spend Rs 350 crore in drilling 22 exploratory wells in the NELP-IX blocks CB-ONN-2010/1, CB-ON-2010/6 and CB-ONN-2010/9 in Gujarat.
8The drilling depth will be between 2500 to 3000 metres
810 wells will be drilled in CB-ONN-2010/1
87 wells in CB-ON-2010/6
83 wells in CB-ONN-2010/9
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8The drilling depth will be between 2500 to 3000 metres
810 wells will be drilled in CB-ONN-2010/1
87 wells in CB-ON-2010/6
83 wells in CB-ONN-2010/9
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Warring Iraq may sound like the unlikeliest place to drive home cost and technological innovations but that is what it just did in the oil sector.
8The government has announced that its projected 2016 oil sector expenditure had been cut “to a little more than $9 billion”, compared with $13.1 billion in 2015.
8In 2016, companies working in service contracts in Iraq estimated costs at $23 billion but after what have been called "complex negotiations", the price tag has been cut to $9 billion
8The cut will be done while maintaining production and development plans.
8Iraq in September last year, asked companies to submit their proposed budgets and plans, which would take into account lower steel, services and equipment costs, but also with instructions not to take on any new commitments in 2016.
8Iraq’s 2016 budget assumes an average crude oil price of $45/b, a level that is forecast to bring revenue of around $59bn, which would represent some 85 per cent of the country’s total revenues.
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8The government has announced that its projected 2016 oil sector expenditure had been cut “to a little more than $9 billion”, compared with $13.1 billion in 2015.
8In 2016, companies working in service contracts in Iraq estimated costs at $23 billion but after what have been called "complex negotiations", the price tag has been cut to $9 billion
8The cut will be done while maintaining production and development plans.
8Iraq in September last year, asked companies to submit their proposed budgets and plans, which would take into account lower steel, services and equipment costs, but also with instructions not to take on any new commitments in 2016.
8Iraq’s 2016 budget assumes an average crude oil price of $45/b, a level that is forecast to bring revenue of around $59bn, which would represent some 85 per cent of the country’s total revenues.
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Technological advances will also involve transportation and petrochemical sectors:
Transportation
8Natural gas as a third fuel at gas stations (CNG for cars, LNG for long-haul trucks)
8Electric hybridization of city cars (Japan with more than 30 per cent, but otherwise no significant global penetration)
8LNG as a new bunker fuel for ships (by 2040, LNG bunkers have the potential to make up to 20 per cent of bunkering fleets)
8Incremental adoption of fuel-saving technologies (involving new engine and frame designs)
8LNG in aircraft to replace kerosene (currently not feasible; Boeing study points at implementation towards 2050).
Petrochemicals
8In petrochemicals, flat glass may be substituted by polycarbonate thereby creating a huge demand potential for oil-based chemicals.
8Greater use of plastics; synergies with renewables (wind rotors, translucent materials for PV cells).
8Crude will grow as a feedstock in integrated refinery and petrochemical plants (ethylene from NGLs will require strategic positioning of oil-based petrochemicals towards propylene, C4 and aromatics).
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Transportation
8Natural gas as a third fuel at gas stations (CNG for cars, LNG for long-haul trucks)
8Electric hybridization of city cars (Japan with more than 30 per cent, but otherwise no significant global penetration)
8LNG as a new bunker fuel for ships (by 2040, LNG bunkers have the potential to make up to 20 per cent of bunkering fleets)
8Incremental adoption of fuel-saving technologies (involving new engine and frame designs)
8LNG in aircraft to replace kerosene (currently not feasible; Boeing study points at implementation towards 2050).
Petrochemicals
8In petrochemicals, flat glass may be substituted by polycarbonate thereby creating a huge demand potential for oil-based chemicals.
8Greater use of plastics; synergies with renewables (wind rotors, translucent materials for PV cells).
8Crude will grow as a feedstock in integrated refinery and petrochemical plants (ethylene from NGLs will require strategic positioning of oil-based petrochemicals towards propylene, C4 and aromatics).
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How are technologies going to evolve in the future? A projection shows that the following types may gain traction in the times ahead:
Upstream
8Carbon capture and storage (CCS) by combining it with Enhanced Oil Recovery
8Commercial exploration of methane hydrates from the seabed (Japan and perhaps India)
8Hydraulic fracturing combined with horizontal drilling.
Mid-stream:
8Small-scale gas-to-liquid (GTL) LNG plants (currently at the pre-commercial stage)
8Floating LNG (Australia) with a possible market breakthrough after 2025.
Power generation
8A revival of nuclear energy is predicted, possibly using 232Th technology post-2040;
8Large stationary fuel cells (highly efficient, can operate on natural gas or petroleum-based fuels in areas without natural gas supply)
8Centralized power generation through the integration of refinery and power generation plants
8Third-generation biofuels, ethanol, diesel and kerosene-type fuels, which can be produced alongside animal feed, fresh water and food supplements.
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Upstream
8Carbon capture and storage (CCS) by combining it with Enhanced Oil Recovery
8Commercial exploration of methane hydrates from the seabed (Japan and perhaps India)
8Hydraulic fracturing combined with horizontal drilling.
Mid-stream:
8Small-scale gas-to-liquid (GTL) LNG plants (currently at the pre-commercial stage)
8Floating LNG (Australia) with a possible market breakthrough after 2025.
Power generation
8A revival of nuclear energy is predicted, possibly using 232Th technology post-2040;
8Large stationary fuel cells (highly efficient, can operate on natural gas or petroleum-based fuels in areas without natural gas supply)
8Centralized power generation through the integration of refinery and power generation plants
8Third-generation biofuels, ethanol, diesel and kerosene-type fuels, which can be produced alongside animal feed, fresh water and food supplements.
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Apr 05 : Gas reserves to last 200 years, oil 150 years-VI: All of US shale output viable at $ 55/bbl
All of American shale gas production is going to be viable only at $ 55-60/bbl and not at the current price of crude, according to expert opinion.
8This view claims that if oil prices continue to remain very low, there will be more investment cut backs, leading to a sharp fall in production.
8This means that if current low prices stay that way for two years, the third year may see a supply-demand gap that will spike the price of oil to the $ 100 mark.
8Eventually, according to this opinion, US oil production will grow when the price is in the range of $ 55-60 even though the possibility of few independent producers beginning to drill new wells when the price crosses $ 40/bbl cannot be ruled out.
8A price of $60-70 will see a spike in North American production, which will again work to cool down values.
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8This view claims that if oil prices continue to remain very low, there will be more investment cut backs, leading to a sharp fall in production.
8This means that if current low prices stay that way for two years, the third year may see a supply-demand gap that will spike the price of oil to the $ 100 mark.
8Eventually, according to this opinion, US oil production will grow when the price is in the range of $ 55-60 even though the possibility of few independent producers beginning to drill new wells when the price crosses $ 40/bbl cannot be ruled out.
8A price of $60-70 will see a spike in North American production, which will again work to cool down values.
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Projections show that India never really catches up with China in energy use even though its population will surpass that of its neighbor and will stand at 1.6 billion by the year 2040.
8Despite efforts to wean itself away from coal, India's coal fired electricity generation will double by 2040 whereas China will look for renewable energy and gas to meet its demand.
8Unlike projections made earlier, by the year 2040, China will remain a much larger economy than India.
8China's energy consumption will be three and half times higher than that of India.
8This happens even as India's energy demand goes up 86% against China's 32% by the year 2040. India's annual growth rate for energy demand will be 2.4% against China's 1.1% between 2014-2040.
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8Despite efforts to wean itself away from coal, India's coal fired electricity generation will double by 2040 whereas China will look for renewable energy and gas to meet its demand.
8Unlike projections made earlier, by the year 2040, China will remain a much larger economy than India.
8China's energy consumption will be three and half times higher than that of India.
8This happens even as India's energy demand goes up 86% against China's 32% by the year 2040. India's annual growth rate for energy demand will be 2.4% against China's 1.1% between 2014-2040.
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Will India's air get dirtier in the years ahead?
8Latest projections show that even while global CO2 emissions peak around 2030, India's emission level will continue growing in 2040
8Already Emissions are falling in OECD countries and will drop a further 20 percent between 2014-2040
8Meanwhile China’s surge in emissions is slowing and is seen peaking around 2030
8Emissions however keep rising to 2040 in India even as its emission intensity improves by 50% despite the rising use of coal.
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8Latest projections show that even while global CO2 emissions peak around 2030, India's emission level will continue growing in 2040
8Already Emissions are falling in OECD countries and will drop a further 20 percent between 2014-2040
8Meanwhile China’s surge in emissions is slowing and is seen peaking around 2030
8Emissions however keep rising to 2040 in India even as its emission intensity improves by 50% despite the rising use of coal.
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Natural gas demand will go up by 50% by the year 2040 but prices may never rise very high in the face of abundant supply.
8LNG supply almost triples during this period, primarily to serve Asia's demand growth
8Inter-regional natural gas pipeline exports will rise by 70 percent.
8By 2040, unconventional gas will account for about one-third of global gas production
8The projection shows that oil remains the world’s top fuel, but natural gas grows the most
8Oil will remain essential to transportation and chemicals but gas overtakes coal, driven by need for cleaner, reliable fuel
8Nuclear and renewal energy witness strong growth and total more than 20 percent of supply by 2040.
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8LNG supply almost triples during this period, primarily to serve Asia's demand growth
8Inter-regional natural gas pipeline exports will rise by 70 percent.
8By 2040, unconventional gas will account for about one-third of global gas production
8The projection shows that oil remains the world’s top fuel, but natural gas grows the most
8Oil will remain essential to transportation and chemicals but gas overtakes coal, driven by need for cleaner, reliable fuel
8Nuclear and renewal energy witness strong growth and total more than 20 percent of supply by 2040.
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The fact that abundant oil and gas resources will be tapped at the right price point means that the days of artificial pricing are coming to an end.
8Given that hydrocarbons can be efficiently moved from one end of the globe to the other also indicates that a price bubble cannot exist in isolation anywhere in the world.
8Even if a ceiling price is announced as has been done in India, the effective price point below this ceiling will be determined by the dynamics of the domestic market.
8An artificial ceiling actually does not encourage competition. The entrepreneurial mindset is allowed to be subjugated to that of the bureaucrat's. It stymies investments.
8Why use naphtha or fuel oil as a benchmark? This is only possible if every furnace in India is equipped with a dual feed system that can easily substitute gas for naphtha. If the substitution is not seamless, then it is unfair to use a benchmark to replace what the markets can do best.
8Already, India has a free pricing regime under its new exploration policy. Free pricing is also allowed for small and marginal fields.
8So why enforce an artificial regime on investors who want to tap the country's deepwater reserves? It just does not make sense nor does the January 1 deadline set for such discoveries to elicit the protection of a ceiling price.
8Given the massive global LNG supply overhang and the furious pace at which LNG gasification units are expected to be set up in India, pushing investors to cater to the whimsicalities of an artificial pricing regime while also dealing with the challenges of wringing out oil from complex deepwater and HPHT discoveries is not a step in the right direction by the government.
8It is only hoped that by the time the new discoveries go on stream, the edifice would stand dismantled.
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8Given that hydrocarbons can be efficiently moved from one end of the globe to the other also indicates that a price bubble cannot exist in isolation anywhere in the world.
8Even if a ceiling price is announced as has been done in India, the effective price point below this ceiling will be determined by the dynamics of the domestic market.
8An artificial ceiling actually does not encourage competition. The entrepreneurial mindset is allowed to be subjugated to that of the bureaucrat's. It stymies investments.
8Why use naphtha or fuel oil as a benchmark? This is only possible if every furnace in India is equipped with a dual feed system that can easily substitute gas for naphtha. If the substitution is not seamless, then it is unfair to use a benchmark to replace what the markets can do best.
8Already, India has a free pricing regime under its new exploration policy. Free pricing is also allowed for small and marginal fields.
8So why enforce an artificial regime on investors who want to tap the country's deepwater reserves? It just does not make sense nor does the January 1 deadline set for such discoveries to elicit the protection of a ceiling price.
8Given the massive global LNG supply overhang and the furious pace at which LNG gasification units are expected to be set up in India, pushing investors to cater to the whimsicalities of an artificial pricing regime while also dealing with the challenges of wringing out oil from complex deepwater and HPHT discoveries is not a step in the right direction by the government.
8It is only hoped that by the time the new discoveries go on stream, the edifice would stand dismantled.
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Advances in energy technology has effectively buried the doomsday projection of a world where consumption of oil and gas outpaces accretion to reserves. Such a scenario was effectively used by those who wanted to keep the price of oil high.
8The situation has changed rather dramatically now. Already new technology has ensured access to shale gas and tight oil from North America, LNG from the Middle East, oil from deepwater fields off the African coast and energy from wind, solar, battery, hydrogen and nuclear sources. Our growing capacity to move energy between nations – even ones on opposite sides of the world – has expanded energy choice and energy security.
8The latest projections show that the world has 150 years of oil supply at current demand levels. Gas reserves will keep us going for 200 years and only a quarter of such reserves will be tapped by 2040. Not just that, resource estimation keeps rising as technology evolves.
8These reserves can be called into production at a given price of oil and and gas. Technology is moving rapidly to keep the price point low and over the years, the projections are that prices will be lower than higher given the availability of vast resources.
8The energy market will have changed dramatically by 2040. And even as demand rises, it will be a buyers market and there are lessons for Indian policy makers as the world moves away from the hectic quest for energy security in face of abundant resources.
8A nightmare scenario where India is effectively blockaded by a cartel of oil producing nations is now likely to be less of a possibility than ever before.
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8The situation has changed rather dramatically now. Already new technology has ensured access to shale gas and tight oil from North America, LNG from the Middle East, oil from deepwater fields off the African coast and energy from wind, solar, battery, hydrogen and nuclear sources. Our growing capacity to move energy between nations – even ones on opposite sides of the world – has expanded energy choice and energy security.
8The latest projections show that the world has 150 years of oil supply at current demand levels. Gas reserves will keep us going for 200 years and only a quarter of such reserves will be tapped by 2040. Not just that, resource estimation keeps rising as technology evolves.
8These reserves can be called into production at a given price of oil and and gas. Technology is moving rapidly to keep the price point low and over the years, the projections are that prices will be lower than higher given the availability of vast resources.
8The energy market will have changed dramatically by 2040. And even as demand rises, it will be a buyers market and there are lessons for Indian policy makers as the world moves away from the hectic quest for energy security in face of abundant resources.
8A nightmare scenario where India is effectively blockaded by a cartel of oil producing nations is now likely to be less of a possibility than ever before.
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For reference purposes, the website carries here full details of Indian equity oil holdings abroad.
The data is given in the following format:
8Country-wise, block wise holdings of Indian companies
8Latest update on each of these blocks
8Risks associated with these blocks
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The data is given in the following format:
8Country-wise, block wise holdings of Indian companies
8Latest update on each of these blocks
8Risks associated with these blocks
Click here for more. Details
There are new ways now for the oil and gas sector to repair and refurbish their equipment to increase efficiencies in the current depressed environment.
8Companies are today available to provide help on whether equipment can be refuribished or salvaged.
8There is a clear opportunity in some areas to extend operational life.
8Technology is available today to extend properties such as wear resistance, anti-corrosion, anti-fretting, anti-galling and surfaces requiring electrical insulation.
Examples include:
-- Valve applications
-- Drilling equipment
-- BOPs
-- In-site repairs
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8Companies are today available to provide help on whether equipment can be refuribished or salvaged.
8There is a clear opportunity in some areas to extend operational life.
8Technology is available today to extend properties such as wear resistance, anti-corrosion, anti-fretting, anti-galling and surfaces requiring electrical insulation.
Examples include:
-- Valve applications
-- Drilling equipment
-- BOPs
-- In-site repairs
Click here for more. Details
Recent statistics show that cyber security attacks are sharply on the rise across the world and losses as a consequence are mounting.
8The Industrial Control Systems Cyber Emergency Response Team (ICS-CERT) has reported more than 800 cybersecurity incidents since 2011, with most occurring in the energy sector.
8Exacerbating the threat to industrial players is the potential for wider-reaching damage spurred by the increasing integration of information and operations cross sectors.
8Technical risk assessments are fundamental to security within an enterprise, in addition to the specific methods required to perform technical assessments, such as passive vulnerability assessments and non-intrusive technical analysis
8It is also important to investigate and, where possible, understand the actors behind attacks as well as their motivations.
8It is vital to monitor and understand threats as they evolve, which they inevitably do.
8But while various industries have fallen prey to attack, the oil and gas sector has been one of the hardest hit.
8Amongst the most notable cases are the Shamoon virus attack, which shut down more than 30,000 workstations at Saudi Aramco, and the largest ever coordinated cyber attack in Norway recently.
8This report is a must-read for vigilance officers in oil and gas companies in Indi
Click here to figure out understand more on these attacks and how to prevent them from happening. Details
8The Industrial Control Systems Cyber Emergency Response Team (ICS-CERT) has reported more than 800 cybersecurity incidents since 2011, with most occurring in the energy sector.
8Exacerbating the threat to industrial players is the potential for wider-reaching damage spurred by the increasing integration of information and operations cross sectors.
8Technical risk assessments are fundamental to security within an enterprise, in addition to the specific methods required to perform technical assessments, such as passive vulnerability assessments and non-intrusive technical analysis
8It is also important to investigate and, where possible, understand the actors behind attacks as well as their motivations.
8It is vital to monitor and understand threats as they evolve, which they inevitably do.
8But while various industries have fallen prey to attack, the oil and gas sector has been one of the hardest hit.
8Amongst the most notable cases are the Shamoon virus attack, which shut down more than 30,000 workstations at Saudi Aramco, and the largest ever coordinated cyber attack in Norway recently.
8This report is a must-read for vigilance officers in oil and gas companies in Indi
Click here to figure out understand more on these attacks and how to prevent them from happening. Details
Surveillance technology is being increasingly used to notice details such as fluctuations in temperature, noise or equipment performance, access anomalies and unusual personnel movements, which are then continually cross-referenced via a single security management system to identify problems before they have a chance to escalate.
8Then again, an accident alert can be triggered by combining video feeds from a range of cameras with analytics to detect degradation indicators in a facility.
8Thanks to improving IP networking and connectivity, monitoring of this nature can be conducted from an onshore base, supporting leaner operations for assets located offshore.
8Equipment degradation monitoring, however, is not the only way that surveillance can be used to improve safety and cost-efficiency.
8For example, through combining data sets from multiple systems, the time required to detect and respond to suspected leakage can be greatly reduced.
8Thermal camera stations are able to detect spillage by demonstrating variations in temperature and thermal emissivity between the oil and the water.
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8Then again, an accident alert can be triggered by combining video feeds from a range of cameras with analytics to detect degradation indicators in a facility.
8Thanks to improving IP networking and connectivity, monitoring of this nature can be conducted from an onshore base, supporting leaner operations for assets located offshore.
8Equipment degradation monitoring, however, is not the only way that surveillance can be used to improve safety and cost-efficiency.
8For example, through combining data sets from multiple systems, the time required to detect and respond to suspected leakage can be greatly reduced.
8Thermal camera stations are able to detect spillage by demonstrating variations in temperature and thermal emissivity between the oil and the water.
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Recently, upstream oil and gas companies have begun to focus on creating more value from Big Data, trying to grasp the concept and what it means for their business and the industry as a whole.
8But, compared to other industries that have already successfully leveraged Big Data – like the financial sector, digital media, healthcare, etc. – the oil and gas industry is much less mature.
The challenges and obstacles faced by upstream oil and gas with respect to Big Data could be overcome with the following types of solutions:
-- More efficient processes and workflows across the upstream oil and gas lifecycle
-- A higher degree of ‘real-time’ actionable insights
-- A consolidation of data (rather than data silos, data lakes and remote data stores).
Click here to find out more on how Big Data can work for you. Details
8But, compared to other industries that have already successfully leveraged Big Data – like the financial sector, digital media, healthcare, etc. – the oil and gas industry is much less mature.
The challenges and obstacles faced by upstream oil and gas with respect to Big Data could be overcome with the following types of solutions:
-- More efficient processes and workflows across the upstream oil and gas lifecycle
-- A higher degree of ‘real-time’ actionable insights
-- A consolidation of data (rather than data silos, data lakes and remote data stores).
Click here to find out more on how Big Data can work for you. Details
A recent highly respected study has found that the that oil and gas professionals in the Middle East are less affected by the low oil price than those elsewhere in the world, more positive about their future career in the sector and more secure in their jobs.
8According to the survey, 42 per cent of respondents in the Middle East say the current oil price has directly affected their employment, compared with a global average of 57 per cent, and 52 per cent are positive about their future career in the sector, compared with a global average of 41 per cent.
8Security of employment is highest in the Middle East, where 62.1 per cent feel secure or very secure in their jobs, compared with 26.2 per cent in Canada and 18.7 per cent in the UK.
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8According to the survey, 42 per cent of respondents in the Middle East say the current oil price has directly affected their employment, compared with a global average of 57 per cent, and 52 per cent are positive about their future career in the sector, compared with a global average of 41 per cent.
8Security of employment is highest in the Middle East, where 62.1 per cent feel secure or very secure in their jobs, compared with 26.2 per cent in Canada and 18.7 per cent in the UK.
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The Middle East is one of the few places in the world where the drilling rig count has gone up over the last one year.
8The website carries here country-wise number of rigs involved in drilling and related operations, which include drilling, logging, cementing, coring, well testing, waiting on weather, running casing and blowout preventer (BOP) testing.
8A similar report is also carried on North Africa
The following details are given:
8Number of rigs currently deployed
8Rigs deployed last month
8Number of rigs deployed last year
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8The website carries here country-wise number of rigs involved in drilling and related operations, which include drilling, logging, cementing, coring, well testing, waiting on weather, running casing and blowout preventer (BOP) testing.
8A similar report is also carried on North Africa
The following details are given:
8Number of rigs currently deployed
8Rigs deployed last month
8Number of rigs deployed last year
Click here for more information. Details
For companies interested in selling equipment and services in the Middle East, the website carries here the entire list of new oil and gas projects in Qatar
8All projects with commissioning dates going up to 2020 are carried here.
The projects are at different stages of mobilization, including:
8At the EPC stage
8At FEED stage
8At the Feasibility Study stage
8At the Construction stage
8At the Design stage
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8All projects with commissioning dates going up to 2020 are carried here.
The projects are at different stages of mobilization, including:
8At the EPC stage
8At FEED stage
8At the Feasibility Study stage
8At the Construction stage
8At the Design stage
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For reference purposes, the website carries here the details on:
8Cairn Energy's requirement for Production Support in the Ravva Block with the following capability:
-- Built after October 1999
-- Classed by IACS member
-- Deck space minimum 200 m2
-- Capability of DP1 or Azimuth Propulsion
-- FiFi-1
-- Deck Crane of minimum 5 ton SWL in a position 3 mts aft of astern roller
8The full Whistle Blower policy put in place by ONGC Petro additions Limited (OPaL)
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8Cairn Energy's requirement for Production Support in the Ravva Block with the following capability:
-- Built after October 1999
-- Classed by IACS member
-- Deck space minimum 200 m2
-- Capability of DP1 or Azimuth Propulsion
-- FiFi-1
-- Deck Crane of minimum 5 ton SWL in a position 3 mts aft of astern roller
8The full Whistle Blower policy put in place by ONGC Petro additions Limited (OPaL)
Click here for more information. Details
For reference purposes, the website carries here the draft Hydrocarbon Exploration and Licensing Policy (HELP) Gazette notification. It outlines the features of the new policy that includes:
8A single license for conventional and non-conventional exploration
8An Open Acreage Licensing Policy for selection of blocks
8Details of the fiscal regime
8Details of royalty payments involved
8Pricing and sale of crude oil and gas
8An expanded exploration phase
8Model for invitation of bids
8Role of an Empowered Committee of Secretaries
8Customs duty and cess payments
8Management Committee mandate
8Eligibility conditions
8Site restoration conditions
Click here for more information Details
8A single license for conventional and non-conventional exploration
8An Open Acreage Licensing Policy for selection of blocks
8Details of the fiscal regime
8Details of royalty payments involved
8Pricing and sale of crude oil and gas
8An expanded exploration phase
8Model for invitation of bids
8Role of an Empowered Committee of Secretaries
8Customs duty and cess payments
8Management Committee mandate
8Eligibility conditions
8Site restoration conditions
Click here for more information Details
The following are the highlights of IOC's performance for 2015-16:
8Crude throughput of 56.1 MMT with a capacity utilization of 103.5% during the year 2015-16.
8Combined distillate yield of 80.5 wt% as against 78.8% during 2014-15.
8Fuel & Loss (F&L), Specific Energy Consumption (MBN) and Energy Intensity Index (EII) at 8.53%, 53.8 and 101.2 respectively, as compared to the previous best of 8.77%, 54.4 and 104.5 for the year 2014-15.
8Indian Oil’s refining capacity currently is 69.2 MMTPA.
8To meet BS-IV norms by 2020, revamp projects and new projects are envisaged at Gujarat, Panipat, Mathura, Haldia, Digboi and Bongaigaon Refineries.
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8Crude throughput of 56.1 MMT with a capacity utilization of 103.5% during the year 2015-16.
8Combined distillate yield of 80.5 wt% as against 78.8% during 2014-15.
8Fuel & Loss (F&L), Specific Energy Consumption (MBN) and Energy Intensity Index (EII) at 8.53%, 53.8 and 101.2 respectively, as compared to the previous best of 8.77%, 54.4 and 104.5 for the year 2014-15.
8Indian Oil’s refining capacity currently is 69.2 MMTPA.
8To meet BS-IV norms by 2020, revamp projects and new projects are envisaged at Gujarat, Panipat, Mathura, Haldia, Digboi and Bongaigaon Refineries.
Click here for more information. Details
For reference purposes, the website carries here a new set of projected crude and gas prices.
Year-wise data until the year 2030 is given for:
8US Henry Hub price
8WTI Crude price
8Propane price
8Butane price
Click here for more information. Details
Year-wise data until the year 2030 is given for:
8US Henry Hub price
8WTI Crude price
8Propane price
8Butane price
Click here for more information. Details
For reference purposes, the website carries here business development opportunities for equipment and service providers in the oil refining sector in India.
8Company-wise refining capacity expansion between 2016-20 is elaborated
8This data is given both for public as well as private sector refineries
8Individual company expansion plans are discussed
8Fuel quality upgrade programmes are also elaborated
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8Company-wise refining capacity expansion between 2016-20 is elaborated
8This data is given both for public as well as private sector refineries
8Individual company expansion plans are discussed
8Fuel quality upgrade programmes are also elaborated
Click here for more information. Details
ONGC has already bitten the bullet by announcing a Rs 34,000 crore capex for the deepwater KG-DWN-98/2 block under the new gas pricing paradigm
8The public sector E&P says that it will elicit a 15% post tax return on the investment at a gas price of $6.5/mmbtu.
8ONGC is home and safe with the ceiling price of $6.61/mmbtu on GCV basis announced by the government for April-September period.
8But can this ceiling price go down further?
8There is a downside risk as the supply glut in the LNG market intensifies. It is assumed that the basket of alternate fuels on which the ceiling price is determined will veer around the same level as the spot price of LNG or above this level, leaving the price to be determined by how the spot price of LNG is determined.
8There are reports that LNG prices for April 2016 deliveries are in the range of low to mid-$4s/mmbtu.
8At these price levels, even assuming a mark-up to determine the ceiling price, ONGC is unlikely to elicit a positive return on the capex. Details
8The public sector E&P says that it will elicit a 15% post tax return on the investment at a gas price of $6.5/mmbtu.
8ONGC is home and safe with the ceiling price of $6.61/mmbtu on GCV basis announced by the government for April-September period.
8But can this ceiling price go down further?
8There is a downside risk as the supply glut in the LNG market intensifies. It is assumed that the basket of alternate fuels on which the ceiling price is determined will veer around the same level as the spot price of LNG or above this level, leaving the price to be determined by how the spot price of LNG is determined.
8There are reports that LNG prices for April 2016 deliveries are in the range of low to mid-$4s/mmbtu.
8At these price levels, even assuming a mark-up to determine the ceiling price, ONGC is unlikely to elicit a positive return on the capex. Details
The PPAC last week came out with a two-line statement that the ceiling price for deepwater and HTHP gas for the April-September period will be $6.61/mmbtu on a GCV basis.
8This price is based on Platt's Delivered Ex-Ship value in West India, wherein the seller of LNG fulfills its obligation of delivering the LNG aboard a ship at the Dahej or Hazira LNG terminal.
8While the broad formula is already known, it will allow for more transparency if the price tables are made public.
8This should not be a problem as only past data will be used.
8It will allow both the operators and industry watchers to arrive at a meaningful conclusion about how prices are going to behave by the time their discoveries come into production.
8"A huge amount of investment is pegged on this price, and it will be good for everyone to know how exactly the price is arrived at," an industry executive told this website.
8But none of the present data is going to be relevant for operators of these blocks because by the time the discoveries come on stream, it will be three years from now.
8By then, the price dynamics governing the LNG market is likely to change Details
8This price is based on Platt's Delivered Ex-Ship value in West India, wherein the seller of LNG fulfills its obligation of delivering the LNG aboard a ship at the Dahej or Hazira LNG terminal.
8While the broad formula is already known, it will allow for more transparency if the price tables are made public.
8This should not be a problem as only past data will be used.
8It will allow both the operators and industry watchers to arrive at a meaningful conclusion about how prices are going to behave by the time their discoveries come into production.
8"A huge amount of investment is pegged on this price, and it will be good for everyone to know how exactly the price is arrived at," an industry executive told this website.
8But none of the present data is going to be relevant for operators of these blocks because by the time the discoveries come on stream, it will be three years from now.
8By then, the price dynamics governing the LNG market is likely to change Details
With ONGC throwing in its hat in the ring, it is now the turn of the RIL-BP duo to make the next move.
8When is it going to announce plans to start working on its discoveries?
8So far nothing much is being said
8As a first step they will have to withdraw the arbitration proceedings over their right to arms-length pricing of gas. This is a prerequisite laid down by the government for them to avail of the ceiling price
8Then a decision has to be taken on whether the ceiling price will provide a reasonable return on the investments to be made on the KG Basin discoveries.
8There are engineering and design issues too that will have to sorted out about the discoveries before a final decision is taken.
8All this is going to take time.
8Sources said that RIL, the operator of the block, hasn't started floating RFQs yet with equipment and service providers Details
8When is it going to announce plans to start working on its discoveries?
8So far nothing much is being said
8As a first step they will have to withdraw the arbitration proceedings over their right to arms-length pricing of gas. This is a prerequisite laid down by the government for them to avail of the ceiling price
8Then a decision has to be taken on whether the ceiling price will provide a reasonable return on the investments to be made on the KG Basin discoveries.
8There are engineering and design issues too that will have to sorted out about the discoveries before a final decision is taken.
8All this is going to take time.
8Sources said that RIL, the operator of the block, hasn't started floating RFQs yet with equipment and service providers Details
