SUPPLY DRIVING DEMAND: SAYS LAW IN ACTION? Monthly Gas News Commentary: May - June 2017

India

here is optimism on demand for gas that is driving

imports but pessimism on production of domestic

gas. H-Energy, the Mumbai-based oil and gas arm of

Hiranandani Group plans to invest more than ₹ 45 billion

in the natural gas sector in five years to develop LNG re-

gasification units on the west and east coast of India along

with pipeline infrastructure. H-Energy is at an advanced

stage of setting up an LNG re-gasification unit at Jaigarh

port in Maharashtra. As part of its phase-1 plan, the

company in 2017 signed an agreement with France-based

energy company Engie to charter a FSRU. After phase- 1

of the project stabilises, the company will be setting-up a

land based re-gasification plant with an annual capacity of

8 mtpa. Also, the company has already started work on

Jaigarh to Dabhol tie-in pipeline which will carry natural

gas to the gas grid of GAIL (India) Ltd at Dabhol. The

company has also approached PNGRB, for laying a 700

km pipeline to connect the East coast FSRU to major

demand centres in West Bengal.

Fidelity Investments and Morgan Stanley Investment

Management have increased exposure to Indian city-gas

retailers, as the emphasis on clean fuels burnishes the

outlook for the industry. The demand from investors has

been so strong that Indraprastha Gas Ltd, which supplies

to homes and vehicles in New Delhi, raised the cap on

foreign ownership to 30 percent from 24 percent, and

may increase it again to almost half. India’s largest city gas

distributor Gujarat Gas Ltd, where Aberdeen Asset

Management Plc is the biggest non-state investor, and

Mahanagar Gas Ltd. have also seen an increase in

offshore holdings. India’s gas demand is about a fifth of

China’s due to weak domestic supply and poor

infrastructure, though the government is trying to change

this. Measures have been stepped up to improve air

quality in cities by giving priority to distributors such as

Indraprastha Gas for accessing cheaper local gas.

Offshore holdings in Indraprastha Gas climbed to nearly

25 percent as of March 31, from about 21 percent a year

ago, according to data. Aberdeen Asset Management held

about 4.6 percent of outstanding shares in Gujarat Gas as

of end-April. Foreign holdings in the company have

climbed about 3 percentage points to 15.4 percent in the

past year. Mahanagar Gas, which sells the fuel in the

financial capital Mumbai and its suburbs, has seen stock

in the hands of foreign investors increase nearly six times

since listing last year. India’s government wants more

T

June 23, 2017, Volume XIV, Issue 2

Energy News Monitor

QUICK FACT

Solar power today has a share of about 18% to the total renewable power installed capacity

while in terms of the electricity generation the share is about 12%

urban households to use natural gas and LPG for rural

users.

The supply side does not share the optimism of the

demand side. ONGC has said that producing natural gas

is no longer a profitable business for the company as the

government-mandated gas price is significantly below the

cost of production. The oil major has sought a review of

pricing formula from the government. ONGC wants a

floor or minimum price of natural gas be fixed at

$4.2/mmBtu for the business to be viable. With the

current price, it does not make economic or commercial

sense for any company to invest in new fields or in

augmenting production from existing ones. Fresh

investment in unlikely if the price remains below the cost

of production. In October 2014, the government adopted

a new pricing formula using rates prevalent in gas surplus

nations like the US and Canada to determine rates in a

net importing country. Prices have halved to

$2.48/mmBtu since the formula was implemented. India

imports half its natural gas needs and the government is

keen to cut import bill by raising indigenous production

and ‘Make in India’. The price paid to domestic producers

is less than half of the rate paid for import of gas. ONGC

produces 80 percent of the 70 mmscmd which makes it

the biggest gas producer in India. ONGC lost ₹ 50.1

billion in revenue on natural gas business, and about ₹ 30

billion in profit in just last one year.

GAIL said it has drawn up investment plans of ₹ 300

billion for expansion. GAIL is currently executing gas

pipelines worth ₹ 200 billion and another ₹ 100 billion

worth of lines are under various stages of evaluation. The

pipelines under execution include Jagdishpur-Haldia line

that will take the environment friendly fuel to the east.

Current projects will be completed by 2019-20, taking

GAILs pipeline network to 15,000 km from the current

11,000 km. The company has already spent capex of ₹

21.8 billion in FY17 and plans to spend ₹ 42.6 billion in

FY18 and ₹ 77.04 billion in FY19 towards setting up of

pipelines, petrochemical and process plants. GAIL will

get charge of the LNG block, while state-owned power

producer NTPC Ltd would be the largest shareholder in

the power block. The company reported 69 percent drop

in fourth quarter net profit of ₹2.6 billion as it wrote

down the value of its investment in Dabhol power plant.

The company has taken up synchronised development of

seven city gas distribution network projects at Varanasi,

Patna, Jamshedpur, Kolkata, Ranchi, Bhubaneswar and

Cuttack. The first LNG terminal at the east coast is also

coming up in Dhamra in Odisha under a joint venture of

public and private sector companies.

The oil ministry has formed all-powerful review

committees to monitor performance of ONGC and OIL,

and will have power to relinquish any oil and gas field for

auctioning to private firms. Being dubbed as super-

boards, the committees will be headed by the ministry’s

upstream nodal authority DGH, and will review and

monitor performance of areas given to ONGC and OIL

on nomination basis. The two panels, one each for

ONGC and OIL, will review from annual work

programme and budget to declaration of a discovery as

commercial as also reservoir and production

performance, monitoring of development activities and

collaborations with other explorers. The order follows

ministry’s unhappiness with state explorers particularly

on delays in projects linked to output enhancement. It has

already ordered a detailed review of board of directors of

ONGC for a possible revamp of the functional heads.

ONGC produced 86 percent of its 26.13 MT of crude oil

in 2016-17 fiscal from fields given to it on nomination

basis. Natural gas production from nomination fields

accounted for 93 percent of the total output of 25.34 bcm.

The review committee will meet at least once every three

months. Field development plans, feasibility reports of

commercial discoveries in nomination fields and

monitoring of development activities for early

monetisation will also fall within the ambit of the

committees. The visible hand of government

commanding and controlling the oil sector is unlikely to

produce more oil than what the invisible hand of the

market can produce. Even if the invisible hand favours

production, nature’s visible hand that dealt India its

meagre hydrocarbon has set limits on what can be

produced.

The ongoing rupee surge coupled with continuing price

reductions of gas will push fuel cost down by around 5

percent, which in turn will lower the gross margins of

upstream oil and gas players and deter fresh investment

into the sector, Ind-Ra said. For the fifth consecutive

time since implementation of the domestic gas pricing

formula in November 2014, the government in March

lowered domestic gas prices by 0.8 percent to

$2.48/mmBtu. The price will be in force from April 1 to

September 30, 2017. The price ceiling for gas produced

from discoveries in deep-water, ultra-deep water and high

pressure-high temperature areas for the period April-

September 2017 is $ 5.56/mmBtu on gross calorific value

basis, while the domestic prices has been lowered to

$2.48/mmBtu on gross calorific value basis for this

period. However, it will marginally benefit the midstream

entities like GAIL, which will see its trading revenue fall

by ₹ 2.5 billion from domestic sales during in 1H of FY18.

But since GAIL sells its domestic gases on a cost-plus

basis, its gross margins will be protected. GAIL will open

a new energy route for India early next year by beginning

regular imports of shale gas from the US, adding to New

Delhi's bargaining power with its predominantly West

Asian suppliers. GAIL will begin importing gas in ships

under a long-term contract from Dominion Cove Point

LNG project from March 2018 and has floated tender for

chartering ships for transportation. The company has

also made a time-swap deal for 1 MT of US gas for FY19

in an attempt to recast its supply portfolio in line with

domestic demand. GAIL had in 2013 tied up 2.3 MT

LNG supplies for 20 years from Cove Point. It signed

another contract for 3.5 MT of LNG with Cheniere

Energy Inc's Sabine Pass project in Louisiana, the

supplies from which will begin in December 2018. The

company also holds a 20 percent stake in Eagle Ford

Shale of Carrizo Oil & Gas. The contracts with Cheniere

and Dominion make GAIL one of the largest holders of

LNG portfolio linked to Henry Hub, the US gas price

benchmark, and will allow it to market 6 MT of US gas.

Both Cheniere and Dominion projects have US energy

department's permission to export gas to countries such

as India that do not have free trade agreement with

Washington. Regular gas supply from the US at an

affordable rate will underline the impact of a rebound in

the US fracking industry on global energy trade and

widens options for India, giving it leverage against West

Asian suppliers.

Rest of the World

Asian spot LNG prices edged lower as the early restart of

Chevron's Gorgon production facility in Australia

weighed on sentiment, projects offered supply and

demand from Japan stayed weak. Spot prices for July

delivery LNG-AS were assessed at $5.40/mmBtu down

5 cents from earlier. The early restart of Gorgon's first

production line provided an unexpected boost to Asian

supplies after operator Chevron initially estimated the

outage would last until mid-June. Project stakeholder

Exxon Mobil launched a tender to sell one cargo for

delivery in the second half of June days before news of

the facility's restart was made public. The various supply

tenders from Angola, Nigeria and Australia, which

offered June-loading cargoes, came amid muted summer

demand from north Asian buyers. Any downside to Asia

spot prices could be capped by relatively firm European

demand, including in Spain, traders said. Results from the

Nigerian and Angolan sell tender are expected to emerge

in the coming days, but Asian LNG market participants

said it was unlikely that the cargoes would be sold to Asia

given the strength in Atlantic prices.

Japan's Mitsui & Co Ltd plans to expand its LNG trading

operation as demand for the cleaner fuel spurs more spot

transactions in Asia. The move comes amid a big shift in

the market in Asia, which takes in about 70 percent of

global shipments of LNG, with traders and end users

increasing their ability to trade in anticipation of a supply

influx from Australian and US projects. Mitsui traded 2.8

MT of LNG in the year ended March 31, but will receive

more supplies from next year when the Cameron LNG

project in Louisiana starts operations. The Japanese

company has signed up to take 4 MT of LNG annually

from the project, with some of it tied up in term contracts

leaving it with volumes to trade. China currently

imported about 26 MT of LNG in 2016, up by a third

from a year earlier. The company is also looking for

buyers for supplies from an LNG project in Mozambique

led by Anadarko in which Mitsui has a stake.

With a tanker expected to arrive in Taiwan shortly, the

US will increase the number of countries that have

received LNG from the Sabine Pass terminal in Louisiana

to at least 23 of the 35 that can accept the vessels. The

Cadiz Knutsen tanker will go to the Taichung LNG

terminal in Taiwan with a load of super-cooled gas from

Cheniere Energy Inc's Sabine, according Genscape

shipping data. The increase in US deliveries coincides

with the LNG market worries that Qatar, the world's

biggest LNG exporter, could experience problems

delivering fuel to some countries after Saudi Arabia and

a few other Arab nations severed diplomatic and

transport links with the gulf sheikhdom after accusing the

country of sponsoring terrorism.

The Netherlands is set to receive its first LNG delivery

from Cheniere Energy's Sabine Pass export plant in the

US, according to shipping data. The Arctic Discoverer

vessel, with a carrying capacity of 133,500 cubic metres

of LNG, departed the facility on the Gulf Coast and is

listed as heading for Rotterdam, data shows. Cheniere is

currently the only company able to export large cargoes

of LNG from the continental US but very few have so

far landed on European shores despite analyst

expectations of a surge in supply. According to US

Department of Energy data, the biggest beneficiary of

Sabine Pass volumes has so far been Mexico, followed by

Chile, China, Japan, Jordan, India and Turkey. Currently

Spain, Portugal, Italy and Malta are the only European

countries to have received deliveries. Analysts and some

LNG traders expect European imports to improve from

this summer due to increased LNG production capacity

as markets in Asia and elsewhere struggle to absorb the

growing pool of supply. In February Britain received its

first ever LNG delivery from Peru aboard the Gallina

tanker. Royal Dutch Shell exports LNG from Peru,

mostly to Mexico, but due to contractual issues with

Mexico's CFE the oil major had opted instead to divert

some cargoes into alternate markets, traders said.

Austrian energy group OMV and Russia's Gazprom are

considering reviving a gas pipeline project through the

Black Sea connecting Russia to central and southern

Europe. If realized, the project would likely boost the

importance of OMV's Baumgarten gas hub, which

distributes around 57 bcm a year. The project would be

an extension of the TurkStream pipeline, which Gazprom

plans to finish by the end of 2019. The extended line

could pump Russian gas to Italy, which currently receives

supplies from Baumgarten via the TAG and SOL

pipelines. Alternatively, Russian gas could go from

western Turkey via Greece to Italy. Russia scrapped the

South Stream pipeline project, which would have

supplied Russian gas to southern Europe with an

undersea pipeline to Bulgaria, in late 2014 because of

objections from the European Union on competition

grounds.

The government of Australia's Northern Territory gave

the go-ahead to start building a $600 million gas pipeline

that could help ease a shortage of the commodity in the

country's east. Jemena, owned by State Grid Corp of

China and Singapore Power, was given permission to

build the westernmost portion of the 622 km line

designed to connect gas fields in northern Australia with

the eastern state of Queensland. Australia is the world's

second-largest LNG exporter, but has faced a growing

crisis over local gas supply with prices rocketing over the

past two years as the commodity is shipped abroad. The

company had previously said it planned to begin

construction of a compressor station, for which it has

already won approval, in May, and that it may eventually

extend the pipeline.

ConocoPhillips said that production and exports of LNG

from an investment project in Qatar have not been

affected by growing Middle East diplomatic tensions.

Saudi Arabia, Bahrain, Egypt and the United Arab

Emirates cut ties with Qatar, accusing the country of

supporting extremism. Qatar has denied the allegations.

Concerns have grown that global access to Qatar's LNG

could be cut, especially after some Persian Gulf ports said

they would not accept Qatari-flagged vessels. Houston-

based ConocoPhillips owns a 30 percent stake in an LNG

project operated by Qatargas Operating Co Ltd, part of

the state-controlled energy company. Mitsui & Co Ltd

owns a remaining 1.5 percent stake in the project, which

processes about 3 m/day. ConocoPhillips controls the

Golden Pass LNG facility in the US along with Exxon

Mobil Corp and Qatar Petroleum.

Qatar has no plan to shut the Dolphin pipeline that

transports natural gas to the UAE despite the severing of

diplomatic ties between the two Gulf Arab nations. Saudi

Arabia, the UAE, Egypt and Bahrain said they would cut

all ties including transport links with Qatar, the world's

top seller of LNG, accusing it of supporting terrorism.

Doha denies the accusation. Qatar supplies roughly a

third of global LNG - natural gas that has been converted

into liquid form for export. The pipeline was the first

cross-border gas project in the Gulf Arab region. It

pumps around 2 billion cubic feet of gas per day to the

UAE. Tankers load Qatari crude along with UAE oil as

shipping ban eases. The diplomatic dispute has stoked

concern that any supply disruption could spill over into

global gas markets. Even a partial shutdown would force

the UAE to seek replacement LNG supplies. The UAE

could cope with Qatar suspending its two to three

monthly LNG deliveries by calling on international

markets, but Dolphin piped flows are too large to replace

fully.

The Philippines aims to build a $2 billion receiving and

distribution facility for imported LNG, as it seeks to

replace depleting domestic gas reserves that now produce

a fifth of its power. Construction could be completed by

2020, or four years before the Malampaya natural gas field

is depleted. The Philippines' energy demand will triple by

2040, with electricity requirements anticipated to grow

four times from 2015. Chinese and Japanese companies

are among the foreign investors who want to help build

energy infrastructure, including LNG facilities. Several

firms have expressed interest in building LNG facilities

in the Philippines, including Manila Electric Company,

formerly in talks with Osaka Gas Co Ltd for a joint

venture.

Talks over new routes for gas supplies to China from

Russia have stalled while Beijing rethinks the balance of

its energy needs, including how much LNG it might use.

Gazprom, which is already building a gas pipeline from

Eastern Siberia to Chin, the Power of Siberia, was in talks

over two more routes: the so-called western gas route and

a gas pipeline from the Pacific Island of Sakhalin.

Gazprom said there were no developments on the two

pipelines, whose combined capacity, if built, is seen

adding up to another 40 bcm in possible gas supplies

from Russia to China per year. The Power of Siberia

pipeline, expected to be launched by the end of the

decade or in the early 2020s, should bring 38 bcm to

China per year. Gazprom managed to clinch the Power

of Siberia deal after ten years of painstaking talks with

Beijing. Neither Gazprom nor state-owned CNPC

immediately responded to requests for comment.

According to BP's energy outlook to 2035, the share of

pipeline gas supplies to China, including from Russia, will

remain largely unchanged over the ten years from 2025,

with the share of LNG and China's own gas output

significantly rising.

Oil majors BP and Eni are deepening their foray into

blockchain technology, starting to run blockchain trades

in parallel with their live trading systems, according to

developer BTL Group. The energy traders, together with

Austria's Wien Energie, had previously tested BTL's

Interbit blockchain platform over 12 weeks, carrying out

trades in European natural gas.

Sinopec said it has started building China's largest natural

gas storage and logistics center with the capacity to store

up to 10 bcm of gas in Henan province in the central part

of the country. The world's second-largest economy is

investing in infrastructure from pipelines to storage tanks

as Beijing prepares to switch from coal-fired boilers and

heating systems across 28 of its smoggiest cities to natural

gas or electricity by October. The storage facility is

expected to open in May 2018. The storage facility will be

connected to pipelines and supply gas to central China,

Beijing and Tianjin.

LNG: Liquefied Natural Gas, ONGC: Oil and Natural Gas

Corp, mmBtu: million metric British thermal units, OIL: Oil

India Ltd, FY: Financial Year, mtpa: million tonnes per annum,

bcm: billion cubic meters, mmscmd: million metric standard

cubic meter per day PNGRB: Petroleum & Natural Gas

Regulatory Board, DGH: Directorate General of

Hydrocarbons, MT: Million Tonnes, Ind-Ra: India Ratings and

Research, FSRU: Floating Storage and Regasification Unit, US:

United States, CNPC: China National Petroleum Corp, UAE:

United Arab Emirates

NATIONAL: OIL

BPCL reassessing plan to build oil refinery in

Allahabad

June 20, 2017. Bharat Petroleum Corp Ltd (BPCL) is

revisiting its mothballed plan to build a refinery in

Allahabad to cater to the expanding demand for fuel in

the country. India’s fuel demand rose 5% in 2016-17,

with consumption of diesel and petrol rising about 2%

and 9% respectively. The expansion in fuel demand has

spurred refiners to increase capacity, which the

government expects to go up by 150 million tonnes in the

next 7-8 years from 235 million tonnes today. The

increase is expected to include 50-60 million tonnes of

brownfield expansion. BPCL, along with Indian Oil Corp

(IOC) and Hindustan Petroleum Corp Ltd (BPCL), is

working on setting up the world’s biggest greenfield

refinery in Maharashtra. BPCL holds 25% stake in the

mega project in which Saudi Aramco is said to be keen to

invest.

Source: The Economic Times

Kochi LPG terminal will ease backlog in Kerala: IOC

June 20, 2017. Indian Oil Corp (IOC) said its proposed

LPG (liquefied petroleum gas) import terminal at

Puthuvypeen in Kochi, construction of which has

witnessed violent protest, will help reduce backlog for

cooking gas in Kerala. IOC said the backlog of supplies

in Kerala is 15 days and the new import facility was aimed

at easing the same. Also, the import terminal would

minimise the movement of bulk LPG tankers through

the highways in the state. IOC moves bulk LPG from

Mangalore to various LPG bottling plants in North

Kerala through about 100 bullet trucks every day, which

ply on narrow highways. Besides the import terminal, the

` 2,200 crore project comprises a multi-user liquid

terminal, the Kochi-Salem LPG pipeline and a bulk

terminal at Palakkad. Out of this, about ` 670 crore is

only towards labour cost, the company said. IOC said the

National Green Tribunal (NGT) had in August 2016

permitted the company to continue with the work.

However, a small group of people have been obstructing

the work since February 16. The company said during the

NGT hearing on April 13 this year, the agitators had

committed to the Tribunal not to obstruct work. IOC

said the terminal will store LPG in mounded vessels,

which are considered the safest in the industry worldwide.

Source: The Times of India

7 petrol pumps sealed for tampered meters in

Mumbai

June 20, 2017. Over the past three days, Thane Crime

Branch has raided nine petrol pumps which showed a

false reading to customers while pumping less fuel than

has been paid for. The Thane crime branch has sealed

seven of the nine petrol stations it raided after learning

that they had been operating with rigged dispensers

which show a false reading to customers while pumping

less fuel than has been paid for. The police believe that

the pumps have each pocketed ` 5.5 lakh a month by

dispensing 5–7 percent less for every litre bought. The

tampering doesn’t come as news to motorists in Thane

and the nearby Dombivali and Khopoli, who have lodged

a slew of complaints with local police stations in the past

few months that they had been short-changed by the fuel

stations. When police informants corroborated these

allegations, the crime branch raided the nine pumps. The

searches led to the discovery that the fuel dispensers at

the stations had been fitted out with a chip that makes

the meter run faster than the petrol being pumped out.

In May, the Thane crime branch had arrested Vinay

Shetye from Dombivali, for running a similar ring in

Uttar Pradesh that made the technology for rigging the

pumps available to many stations in the northern state. It

was during his questioning that the names of some of

these nine petrol pumps, which had allegedly bought the

chips from Shetye, surfaced. Investigation of the other

two pumps is underway, but sources have confirmed they

were also manipulating the machines. The managers and

owners of the nine raided pumps have been arrested.

When questioned, they told the police that the petrol

transporters are involved in the racket but the claim is yet

to be verified, a senior investigator said.

Source: The Economic Times

Oil Minister assures people won't suffer due to

daily revision of fuel prices

June 17, 2017. Oil Minister Dharmendra Pradhan said

people won't suffer due to daily revision of fuel prices.

He said that people will daily get a little profit or loss.

State-owned oil companies such as Indian Oil Corp

(IOC), Bharat Petroleum Corp Ltd (BPCL) and

Hindustan Petroleum Corp Ltd (HPCL), decided on a

pan-India implementation of daily price revision of petrol

and diesel. Before the rollout of daily price revision,

Federation of All India Petroleum Traders (FAIPT)

demanded an automated system to reflect price changes

from the state-run oil marketing companies. The main

concern of the dealers is that they will have to stop the

sales every midnight for considerable time to change the

daily rates. However, the IOC successfully rolled out the

daily revision of petrol and diesel prices across the

country through its network of 26,000-plus petrol pumps.

IOC has developed various information modes for the

customers to check the price being charged by the petrol

pumps including the mobile app wherein the customers

will be able to fetch daily updated prices of petrol and

diesel at all cities through IOC's mobile app Fuel@IOC.

It will also enable customers to cross-check the prices

applicable in their cities by sending SMS on various dealer

codes, including various other options.

Source: Business Standard

India's 2017 diesel imports may rise to highest since

at least 2011

June 16, 2017. India's diesel imports this year may rise to

the highest since at least 2011 as refiners shut down to

upgrade their units to meet new fuel standards and as

warmer temperatures spur demand. India's state-owned

refiners are already seeking or have bought up to 967,000

tonnes of diesel through July, according to tender data.

That exceeds then-record imports of 962,000 tonnes in

2016, according to full-year government data going back

to 2011. The upgrades to meet new Euro IV fuel

standards implemented on April 1 and warmer

temperatures are boosting diesel imports into the world's

third-largest oil consumer, Sri Paravaikkarasu, head of

East of Suez Oil for oil consultants FGE, said. While

monsoon rains typically reduce the need for diesel used

in irrigation pumps, the curtailed supply because of the

maintenance shutdowns will likely continue to boost

imports into the country, Paravaikkarasu said. India is a

net exporter of diesel with its refinery production usually

enough to meet domestic demand, limiting imports. But

the change in fuel standards has boosted imports of

cleaner diesel while it has exported more lower sulphur

diesel, traders said. India's diesel demand is expected to

rise to record levels again this year as a slew of

infrastructure projects boosts the use of the fuel,

although a government-induced cash shortage will hold

growth to its slowest in three years. Diesel demand is

expected to grow by 3 percent this year, lower than the

5.1 percent growth in 2016, Paravaikkarasu said.

Source: Reuters

Petrol price cut by ` 1.12 per litre, diesel by ` 1.24

June 15, 2017. Reflecting global crude oil prices, petrol

price was cut by ` 1.12 per litre and diesel by ` 1.24 per

litre. Oil companies made the announcement in the

evening today and the change in price will be effective

from June 16. From June 16, India will switch to a market

dynamic system under which petrol and diesel prices will

be revised on a daily basis. Rates will change at 6 am

everyday depending on movement in cost on the

previous day. Currently, prices are revised on 1st and 16th

of every month based on the fortnightly average of

international oil price and the foreign exchange rate.

Petrol will cost ` 65.48 a litre in Delhi from June 16 as

against ̀ 66.91 per litre currently. A litre of diesel will cost

` 54.49 as compared to ` 55.94 at present. Indian Oil

Corp (IOC) said daily revision of retail selling price of

petrol and diesel on pilot basis was implemented in

Chandigarh, Jamshedpur, Puducherry District, Udaipur

and Visakhapatnam from May 1.

Source: India Today

Oil Minister invites BP and RIL to invest in fuel

retailing

June 15, 2017. A day before India shifts to a market

dynamic system of daily revision of petrol and diesel

prices, Oil Minister Dharmendra Pradhan invited BP plc,

Europe's third-biggest oil company, and Reliance

Industries Ltd (RIL) to invest in fuel retailing. While RIL

already has a fuel retailing license and has some 1,400

petrol pumps on the ground, BP last year got approval to

set up petrol pumps in India. RIL and BP are partners in

oil and gas exploration but have no such collaboration in

downstream fuel retailing business. BP is the tenth player

to enter the lucrative fuel retailing business that is seeing

double digit growth, not seen anywhere in the world. BP

had in January last year won in-principle approval to retail

aviation turbine fuel (ATF) to airlines in India. RIL too

operates aviation fuelling services separately. India

currently has about 59,595 petrol pumps, with public

sector firms operating a majority of them. Private sector

operators are limited to Essar Oil and RIL, which

between them have some 4,900 petrol pumps. Royal

Dutch Shell operates 85 petrol stations. Numaligarh

Refineries Ltd (NRL) and Mangalore Refineries and

Petrochemicals Ltd (MRPL) are late entrants and have six

outlets between them. Indian Oil Corp (IOC) owns

26,212 petrol pumps, Hindustan Petroleum Corp Ltd

(HPCL) 14,412 stations and Bharat Petroleum Corp Ltd

(BPCL) 13,983 outlets. In aviation turbine fuel (ATF) or

jet fuel retailing, there are 211 aviation fuel stations, 104

of which are owned by IOC, 42 by BPCL and 37 by

HPCL. RIL has 27 aviation fuel stations at airports, while

joint venture of Shell and MRPL owns one.

Source: Business Standard

BPCL eyes Bina refinery expansion to 310k bpd in 4-5 yrs

June 14, 2017. Bharat Petroleum Corp Ltd (BPCL) aims

to expand the capacity of its Bina refinery in central India

to about 310,000 barrels per day (bpd) in the next four to

five years from the current 120,000 bpd. India aims to

expand its refining capacity by 35 percent to 6.2 million

bpd to meet the country's rising fuel demand. BPCL

owns a majority stake in Bharat Oman Refineries Ltd

(BORL), which runs the plant. Oman Oil Co owns 26

percent in the refinery. BPCL aims to shut the Bina

refinery for about a month in June-September 2018 as the

refinery is adding some units to raise capacity to 156,000

bpd.

Source: Reuters

NATIONAL: GAS

India asks Qatar to invest in power plants as

condition for LNG deals

June 20, 2017. India said it would sign future long-term

liquefied natural gas (LNG) purchase deals with Qatar if

only Doha agrees to acquire stakes in the South Asian

nation's power plants, Oil Minister Dharmendra Pradhan

said. India is the latest major LNG buyer to seek

concessions from Qatar, the world's biggest LNG

exporter, in order to re-sign long-term supply contracts.

Amid a global glut of LNG and a slump in prices, other

buyers have sought more flexible contracts, including

clauses that would allow them to resell gas they do not

consume. India is suffering from natural gas shortages

that have required power plants with capacity of as much

as 25,000 MW to shut down or run as lower rates. Qatar's

RasGas is India's biggest LNG supplier. India wants to

gradually move to a gas-based economy and has plans to

raise its annual LNG import capacity to 50 million tonnes

in the next few years from 21 million tonnes now. India

is also open to granting stakes to Qatar in local oil and

gas companies and LNG terminals, should the Gulf

emirate make such a proposal, said Pradhan. India's

biggest gas importer Petronet LNG annually buys 8.5

million tonnes under a long-term contract. It also buys

additional volumes from Qatar under spot deals. Prabhat

Singh, chief executive officer of Petronet, said the Gulf

nation needed to decide quickly on the Indian proposal.

He said India could be a stable outlet for Qatar's LNG.

Source: Reuters

RIL’s KG-D6 investment to up its regulatory

exposure: Moody’s

June 20, 2017. Reliance Industries’ planned $6 billion

investment to monetise gas finds in the KG-D6 block will

increase its exposure to the extremely challenging Indian

QUICK COMMENT Mandating gas exporters to invest in power plants will not

change power market fundamentals! Bad!

gas business that is fraught with delays and retrospective

changes in regulation, Moody’s Investor Service said.

Reliance Industries Ltd (RIL) and its partner BP Plc of

the United Kingdom (UK) announced that they are

moving ahead with development of three fields in the

KG-D6 block off the east coast of India. Investment of

` 40,000 crore in the development of the fields is

expected to produce 30-35 million metric standard cubic

meter per day (mmscmd) by the year 2020-2022. It said

given the regulatory environment, the timing of both the

investments and cash flows from the project remains

uncertain. RIL-BP estimate that the fields have 3 trillion

cubic feet of discovered gas resources, which could be

monetised with these investments. The investment is

subject to approval by the government of the

development plans which RIL and BP plan to submit

before the end of 2017. Currently, RIL only gets $2.5 per

million British thermal unit for its current gas production

from the KG-D6 block. But the new fields are entitled to

a higher rate, which is capped at $5.56. RIL-BP plan to

award soon the contracts for development of the first

field — R-Series, deep water gas fields located in water-

depths of more than 2,000 meters, approximately 70 km

offshore. The companies expect to produce up to 12

mmscmd, with first production in 2020.

Source: The Hindu Business Line

ONGC's Bassein gas field to touch record output in

2018

June 18, 2017. India's largest natural gas field Bassein in

the Arabian Sea has seen a remarkable turnaround with

the natural decline that had set in at the 28-year old field

reversed and output slated to rise by a quarter to a record

high in 2018. The field, which had hit a peak of 29 million

metric standard cubic meter per day (mmscmd) in 2011,

had seen output decline thereafter but the same has now

been reversed in last three years. Gas production has

regained the 30 mmscmd mark and will climb to 34

mmscmd in few weeks before touching 37 mmscmd by

December 2018. Crude oil production from the asset has

risen from about 1 million tonnes to 2.5 million tonnes

in last three years, making it the second highest oil

producing asset of Oil and Natural Gas Corp (ONGC).

Projects worth ` 13,181 crore to exploit C-26, Daman,

Bassein and Vasai East discoveries will help ramp up the

output further. Vasai East additional development

project, costing ` 2,476 crore, will help raise crude oil

production from 5,600 barrels per day (bpd) to 17,550

bpd and gas from 1.3 mmscmd to 2.5 mmscmd. The `

6,086 crore Daman development project will give a peak

gas output of 8.3 mmscmd and 9,600 bpd of condensate

while the ` 4,619 crore Bassein integrated development

project will help produce 19.36 billion cubic meters (bcm)

of gas and 1.97 million cubic meters (mcm) of condensate.

C-26 Cluster development project, costing ` 2,592 crore,

would produce 5.94 bcm of gas and 0.644 mcm of

condensate, they said. Bassein field had 393 bcm of initial

gas in place, of which 248 bcm (about 7 trillion cubic feet)

has been produced. It is ONGC's fastest growing asset,

spread over 7,300 square kilometres in Arabian Sea. It

comprises South Bassein field that produces 18 mmscmd

of gas, NBP (D-1) field, B-193 super sour field, Vasai

East field and C-Series and Daman gas field.

Source: The Times of India

Bengaluru gas distribution project inaugurated

June 18, 2017. GAIL (India) Ltd launched the ₹ 6,283

crore Bengaluru City Gas Distribution (CGD) project.

The project is expected to cover 4,395 sq km in urban

and rural Bengaluru, broadly covering eight sectors —

Nelamangala, Dod Ballapur, Devanahalli, Hosakote,

Bengaluru East, Bengaluru North, Bengaluru South and

Anekal. As part of the project, about 60 compressed

natural gas (CNG) stations are to be set up. The project

will provide cheaper fuel for the transport sector and also

facilitate a healthy lifestyle by creating a pollution-free

environment. GAIL launched a mobile app to provide a

one-stop platform for customers to view/pay piped

natural gas (PNG) bills, locate CNG stations, know about

the benefits of CNG/PNG and get emergency

instructions. Oil Minister Dharmendra Pradhan said that

so far, 66 kms of steel and 452 kms of MDPE pipeline

has already been laid in the city.

Source: The Hindu Business Line

Greka Drilling secures 3 year drilling deal with ONGC

June 16, 2017. Greka Drilling Ltd, an independent oil and

gas driller in Asia, has secured a three year drilling

contract with Oil & Natural Gas Corp (ONGC) for the

Bokaro CBM (coal-bed methane) asset in India. Under

the deal, Greka will deploy one of its purpose-built rigs

in the country. ONGC plans to drill 73 wells over the

next three years using this rig, which has a proven track

record of drilling in similar geological conditions,

according to Greka. The project will entail the provision

of drilling and mud services, along with the provision of

associated equipment, and is estimated to generate total

revenues of $15 million over the three year period.

Source: Rigzone

NATIONAL: COAL

Coal production not affected by ongoing strike: SCCL

June 19, 2017. Singareni Collieries Company Ltd (SCCL)

said the ongoing strike by a few sections of workers'

unions has not impacted coal production. The national

trade unions AITUC, INTUC, CITU, HMS and BMS are

among the unions to have decided to go on indefinite

strike from June 15 demanding implementation of the

revival of the Dependent Employment Scheme (DES) as

promised by the TRS Government during elections. It

further said that the coal production was over 1.71 lakh

tonnes during the past four days against 1.52 tonnes a day

before the beginning of the strike. Meanwhile, CITU in

statement demanded that the management should

immediately call agitating workers for a dialogue. The

trade union held a "round table" on the issue.

Source: The Times of India

JSPL secures coal linkage for a 5 year term in

captive power auctions

June 19, 2017. Jindal Steel and Power Ltd (JSPL) said it

has secured coal linkage in the recently-concluded

auctions for the captive power sub-sector. The captive

power plants of the company are located at Raigarh and

Dongamahuah (Raigarh district) in Chhattisgarh. The

linkages ensure a steady supply of thermal coal to feed

the captive power plant at calorific cost and would further

enhance operational efficiency, the company said. Since

2016, JSPL has secured coal linkages of close to2.3 mtpa

in various sub-sectors for a 5-year timeframe.

Source: The Economic Times

Steel ministry asks CIL to set up more washeries

June 15, 2017. The steel ministry has asked Coal India

Ltd (CIL) to set up more washeries at coal mine pitheads.

According to Union Steel Minister Chaudhary Birender

Singh, the move is expected to help reduce coking coal

imports. According to the Minister, the Centre’s focus on

‘housing for all’ and increased movement of

infrastructure projects are expected to create an

additional demand of around ₹ 40,000 crore worth of

steel in the country.

Source: The Hindu Business Line

NTPC eyes 3 mt coal output this fiscal

June 14, 2017. State-run power giant NTPC which made

its debut in coal mining this fiscal has in a major

development awarded Mine Developer-cum-Operator

contract for its Dulanga coal mine in Odisha, as part of

its plan to produce 3 million tonnes (mt) of the dry fuel

this fiscal. After the start of coal production and dispatch

from Western Quarry of Pakri-Barwadih coal mine in

December 2016, NTPC has now started the same from

Eastern Quarry of this mine, as well. Already 56,352

tonne of coal has been extracted from this quarry. NTPC,

so far, has produced more than 4.6 Lakh tonne of coal

from Pakri-Barwadih mine and successfully despatched

58 coal rakes (2,02,480 tonne of coal) to its Barh power

station. This mine has an estimated mining capacity of 15

million tonnes per annum and has been allotted by the

central government to NTPC as a basket mine to meet

the fuel shortfall of its power stations. Coal mining is

integral to NTPC’s fuel security strategy, which believes

that greater self—reliance on coal will go a long way in

ensuring sustained growth of generation. NTPC has been

allocated eight coal blocks -Pakri— Barwadih, Chatti—

Bariatu & Chatti—Bariatu (South), Kerandari, Dulanga,

Talaipalli, Banai, Bhalumuda and Mandakini—B by

Government of India.

Source: The Hindu

NATIONAL: POWER

Power industry hails ` 5 per unit tariff by Punjab

government

June 20, 2017. The power industry in Punjab has hailed

decision of Congress government led by Chief Minister

(CM) Amarinder Singh to provide power at a uniform

rate of ` 5 per unit in the state. The industry has termed

the action as pro-industry and a step set to accelerate

industrial growth. Confederation of Indian Industry (CII)

hailed the key measures including disbanding truck

unions and the CM’s appeal to the well-to-do farmers to

give up power subsidy voluntarily. CM had announced to

give up the free power while appealing to his Cabinet

colleagues to volunteer for the same.

Source: The Economic Times

Rise in electricity demand to revive stressed power

companies

June 17, 2017. The government expects the demand for

electricity to pick-up in the next couple of years, which

experts believe is critical to revive the power sector

saddled with stressed assets. Experts said transferring the

assets from one developer to the other would not be

enough to revive the stranded assets till the time demand

for electricity does not pick up. The government,

however, feels the problem is of over supply rather than

of lean demand. The demand for power has grown by a

robust 6.4% in the last three years against 6.2% in 2004-

2014, the power ministry said. The government proposes

to set up a special purpose vehicle to hold stressed power

assets and revive them by debt-equity swaps, offering last

mile equity or asking public sector companies like NTPC

to operate them on a contractual basis. Power Minister

Piyush Goyal said the government is close to resolution

of the stressed thermal power projects where developers

are not wilful defaulters or there are no significant

irregularities.

Source: The Economic Times

PFC to launch maiden bonds allowing capital gain

tax exemption

June 16, 2017. Power Finance Corp (PFC), the state-

owned power sector lender, announced it has been

allowed by the government to raise bonds eligible for

capital gain tax exemption under section 54EC of the

Income Tax Act. Section 54EC provides that capital gain

subject to a maximum of ` 50 lakh arising from the

transfer of a long term capital asset will be exempt if the

assesse invests the whole or any part of capital gains in

certain specified bonds within a period of six months. An

investor can save up to a maximum ̀ 10 lakh by investing

maximum permissible amount of ` 50 lakhs in these

bonds. PFC is the lead financier for the Indian power

sector and is the largest infrastructure company in the

country based on net worth. According to a Department

of Public Enterprises survey of March 2017, PFC was

ranked the seventh-highest profit making public sector

undertaking (PSU) among 320 PSUs.

Source: The Economic Times

Power firm struggles to ensure smooth supply

June 14, 2017. The Maharashtra State Electricity

Distribution Company Ltd (MSEDCL) appears to be

struggling to ensure uninterrupted power supply to the

city despite claiming that adequate measures were taken

before the monsoon. Almost the entire city was without

power from 4 pm to 7 pm soon after it started raining.

Power was restored in some areas only late at night.

Consumer activist Raju Gangurde said the MSEDCL

should have restored power supply within a maximum of

three to four hours, but the areas did not receive power

for seven hours. Gangurde said that despite the power

company's tall claims of infrastructure upgradation or

pre-monsoon maintenance, the system is just not being

able to stand the rain.

Source: The Times of India

QUICK COMMENT Increase in electricity demand will not only revive stressed

power companies but also improve quality of life! Good!

NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE

TRENDS

NHPC awards EPC contract for 50 MW Solar

Power project in Tamil Nadu

June 20, 2017. NHPC has awarded an EPC (engineering,

procurement and construction) contract for the

development of 50 MW Solar Power PV Grid connected

project located at Theni and Dindigul districts in Tamil

Nadu to Larsen & Toubro, L&T Construction,

Manapakkam, Chennai for an amount of ` 287.48 crore

with its comprehensive O&M (operating and

maintenance) for 10 years. The project is anticipated to

be completed within 9 months.

Source: Business Standard

Chinese firms inks deal with Adani Group, to invest

$300 mn in Gujarat

June 20, 2017. India's Adani Group inked a deal with

East Hope Group, one of China's largest companies,

which will invest over $300 million to set up a

manufacturing unit for solar power generation equipment

in Gujarat. An estimated investment of more than $300

million is expected to be made by East Hope Group in

India, as part of the proposed cooperation between the

two conglomerates. East Hope Group, a 70 billion yuan

company, is one of the largest corporate houses in China.

Source: Business Standard

Tamil Nadu farmers to get 90 percent subsidy for

solar-powered pump sets

June 19, 2017. Farmers in Tamil Nadu can avail

themselves of 90 percent subsidy for solar-powered

irrigation pump sets if they exit the waiting list for farm

connections. The State government will give 1,000 solar-

powered irrigation pump sets of 5, 7.5 and 10 horsepower

(hp) under a model programme to farmers across the

State. These off grid units will be available with 40

percent State government subsidy, 20 percent from the

Union Ministry of New and Renewable Energy; 30

percent from Tamil Nadu Generation and Distribution

Corporation and the farmer’s share will be 10 percent.

This scheme will be implemented at a cost of ₹ 15 crore,

the Electricity Minister P Thangamani said. To avail this

benefit, farmers will have to apply for irrigation pump

sets under the seniority scheme. The government will also

offer Tatkal scheme in which farmers can get

conventional agriculture connection within six months of

application. They will have to shell out ₹ 2.5 lakh for a 5

hp motor connection; ₹ 2.75 lakh for a 7.5 hp motor

supply; and ₹ 3 lakh for a 10 hp supply. The connection

will be provided within six months for 10,000 applicants,

he said. The government also plans to establish a 500 MW

solar park through a private player; and a mobile app will

also be developed for power consumers to pay their

utility bills, the Minister said.

Source: The Hindu Business Line

Centre removes interstate supply charges on solar

power projects till Dec 2019

June 19, 2017. Solar power projects will be exempted

from interstate transmission charges till the end of

December 2019, making it feasible to compete with

thermal power. The decision was taken by the ministry of

power in consultation with the ministry of new and

renewable energy and other stakeholders since

imposition of charges would have raised cost of using

solar power from another state by ` 1-2.50 per kilowatt

hour (kWh), depending on the distance it is transmitted

and voltage at which it is supplied. Solar tariffs have been

falling steeply in recent years, touching an all-time low of

QUICK COMMENT Subsidising solar-powered pumps today may lead to

complaints over depleting water tables tomorrow! Ugly!

` 2.44 per kWh at Rajasthan’s Bhadla solar park auction

in May, very much on a par with thermal power. But

imposition of interstate transmission charges would have

affected capacity to compete. The Delhi Metro Rail Corp,

for example, signed an agreement in April to draw most

of its daytime power needs from the 750 MW ultra mega

solar power project – three plants of 250 MW each –

being built at the Rewa solar park, Madhya Pradesh.

Source: The Economic Times

Over 12k solar pumps distributed to farmers in

Chhattisgarh

June 19, 2017. Over 12,000 solar pumps have been

distributed so far to the farmers at subsidised rates under

‘Saur Sujala Yojna’ in Chhattisgarh. Chief Minister (CM)

Raman Singh was informed about the development

under the scheme while he was chairing a review meeting

of the energy department. Prime Minister Narendra Modi

had launched the ‘Saur Sujala’ scheme on state’s

foundation day on November 1, 2016 in Raipur. During

the meeting, the CM instructed the officials to focus more

in 85 tribal-dominated development blocks for the

distribution of the solar energy-based irrigation pumps.

Singh expressed satisfaction that the department had

distributed more solar pumps than the set target and

congratulated the officials. The CM further stressed on

the need to cover 20,000 farmers under this scheme by

the end of this year pointing that farmers belonging to

remote areas and inaccessible regions, should be given

priority while distribution. Notably, farmers are being

provided solar-irrigation pumps of 5 horsepower (hp)

and 3 hp at heavily subsidized rates in the state. Solar

irrigation pump worth ` 3.5 lakh (3 hp) is being given to

Scheduled Caste and Scheduled Tribe classes at the cost

of ` 7,000, to Other Backward Class (OBC) at ` 12,000

and general category farmers at ` 18,000. The remaining

amount is borne by the state government, he said. Besides,

the chief minister also directed the officials to complete

electrification of all villages and hamlets by March next

year. Similarly, he also asked to complete the installation

of 32 power substations being established in different

parts of the state, by March next year.

Source: The Financial Express

Cheaper loans, lower registration fee for green

homes soon

June 19, 2017. The government is working on a scheme

to promote energy efficient homes by offering cheaper

loans and lower registration fee for green residential units

as it ramps up efforts to mitigate climate change by

moving towards a net zero-energy building regime.

Government said the proposal is part of ongoing

discussions on framing the ‘Energy Conservation

Building Code for Residential Sector (ECBC-R)’ on the

lines of such a code for government and commercial

buildings framed in 2007. Power, Coal, New and

Renewable Energy and Mines Minister Piyush Goyal is

scheduled to release the refreshed version of the code,

ECBC-2017, outlining a quantum leap towards a greener

outlook for Indian realty. The Bureau of Energy

Efficiency is working on a scheme to incentivise new

homes that are more energy efficient and make lower

demand on utilities for lighting and cooling energy.

ECBC-R will be a booster for the government’s ‘Make in

India’ campaign as it is expected to raise the demand for

energy efficient household equipment as well as other

services. Seen in the backdrop of climate change and

expanding cities, ECBC-R will strengthen the

government’s efforts at reducing the carbon footprint of

a growing segment of energy consumers. It will also add

green jobs in the real estate sector.

Source: The Economic Times

Delhi power department opens registration for

rooftop solar power plants

June 18, 2017. The Delhi government’s power

department said it has opened registration process for

installation of rooftop solar power plants in the city, as it

aims to tap 1 GW of green energy by the year 2020.

Under the scheme, 30 percent central finance assistance

will be given by the ministry of new and renewable energy

on the cost of solar photovoltaic plant. The generation

based incentive of ` 2 per unit is also there for residential

category. The Indraprastha Power Generation Company

Ltd has empanelled vendors for solar photovoltaic

installations. Lt Governor Anil Baijal had directed the

power department to prepare a standard operating

procedure and a roadmap for promoting installation of

solar power panels in the city. The Delhi Solar Policy,

which aims at mass adoption of solar power in the city,

was notified on September 27, 2016. The highlights of

the policy includes a generation-based incentive for three

years.

Source: The Financial Express

Tamil Nadu interested on low floor electric vehicle

buses: Ashok Leyland

June 16, 2017. Tamil Nadu Government has shown

interest to purchase low floor, air conditioned electric

vehicle CIRCUIT provided by Hinduja Group flagship

Ashok Leyland. Ashok Leyland, Head-Global Bus, T

Venkataraman said the company introduced the electric

vehicle in October last year and has been talking to

various governments for providing the service. Asked on

the company's overseas operations in Electric Vehicle

business, he said Ashok Leyland already operates such

buses in London under "Optare" brand. The buses can

be produced on multiple platforms depending upon the

customer's requirement, he said. Ashok Leyland

showcased the electric vehicle CIRCUIT in October 2016.

The buses equipped with fire detection and suppression

system can travel upto 120 kilometrs on a single charge

under standard test conditions.

Source: The Economic Times

Tesla plans electric car factory in India

June 16, 2017. Tesla Motors is planning to set up a

factory in India to cater to the local demand for electric

cars, at a time when the Modi government has launched

an ambitious plan of moving to 100 percent electric

mobility by 2030. The United States (US) carmaker is

looking to enter India as a retailer and is in talks with the

government for waiver of restrictions on imports of its

high-end electric cars until its factory is built. The import

penalties or restrictions that Elon Musk, chief executive

officer, Tesla, referred to are most likely the norms for

multinationals to set up single-brand retail in India, which

mandate them to source at least 30 percent locally. Unlike

traditional automakers, Tesla sells and services its vehicles

on its own rather than through local dealers. Over the

past couple of years, this policy has largely worked, with

brands such as Mercedes-Benz, Audi, BMW, JLR and

Volvo having units in India. Experts believe that the

government should do the same even for electric vehicles

as it will help boost the local industry.

Source: The Economic Times

India ranks 75th in environmental impact survey

June 16, 2017. Mozambique, the southern African

country rated as one of the poorest, has topped a survey

of nations with the lowest global environmental impact

while India has ranked a dismal 75th in the report.

Mozambique topped the list because almost all its energy

use comes from green sources. India, on the other hand,

was placed 75th, with renewable energy making up only

15.2 percent of all energy used; only 2.2 percent of waste

water being recycled, and municipal waste of 0.34 kg per

person being generated daily.

Source: The Economic Times

Azure Power receives $10.5 mn solar rooftop

funding from World Bank

June 16, 2017. Azure Power, an independent solar power

producer in India, announced it has been granted ` 67.83

crore ($10.5 million) of low-cost debt financing through

the State Bank of India (SBI)-World Bank Grid

Connected Rooftop Solar PV Program. The loan is

granted for 15 years with an interest rate of 8.35 percent

per annum, among the lowest interest rates availed by

solar power developers in India, according to the

company. The World Bank and the International Bank

for Reconstruction and Development (IBRD) approved

a line of credit of $625 million to support the

government’s goal to expand rooftop solar capacity to

40,000 MW. The company said its Azure Roof Power

platform has over 1,000 MW capacity projects across 18

states. Its customers include commercial real estate

companies, a chain of premium hotels, distribution

companies in smart cities, warehouses, Delhi Metro Rail

Corp (DMRC) and Indian Railways.

Source: The Economic Times

GUVNL invites bids to procure 1 GW renewable

energy

June 16, 2017. Gujarat Urja Vikas Nigam Ltd (GUVNL)

has decided to buy 1,000 MW of renewable power

through competitive bidding, which will be followed by

an e-auction for the lowest price. The company floated

two separate tenders for procuring 500 MW each from

solar and wind power projects. According to the request

for selection (RFS) document, GUVNL has invited bids

to procure solar and wind power to fulfil renewable

purchase obligations (RPOs) and to meet the future

needs of its distribution companies. The RPO mandates

that distribution company buy electricity from renewable

sources for a defined minimum percentage of the total

consumption of its consumers. The last date for

submission of bids is July 10, 2017 and a pre-bid meeting

for the tenders will be held on June 30. After opening the

technical bids on July 11, the reverse auction will take

place on July 17 and 18 for wind and solar tenders

respectively. The bidders selected by GUVNL based on

this RFS, shall set up wind and solar power projects in

accordance with provisions of the RFS document and

standard power purchase agreement.

Source: The Economic Times

Bihar eyes ` 200 bn investment in renewable energy

in 5 yrs

June 16, 2017. Bihar is eyeing an investment of ` 20,000

crore in the renewable energy sector in the next five years

to generate over 3,000 MW of clean energy. The plan is

part of the new renewable energy policy that aims to tap

the potential of new and renewable sources of energy in

the state. Bihar Renewable Energy Development Agency

director R. Lakshmanan said that with Bihar's increasing

population and rapidly growing economy, the state needs

access to clean, cheap and reliable sources of energy.

Lakshmanan said the new renewable policy target is for

installed capacity of 2,969 MW solar, 244 MW biomass

and 220 MW small hydropower in the next five years so

as to meet the growing demand of power in an

environmentally sustainable manner. The Centre for

Environment and Energy Development (CEED) chief

executive officer Ramapati Kumar said with a well

defined target, fixed timeline, emphasis on solar rooftops

and decentralised renewable energy systems, the

agriculture sector will be transformed. Most of the

expected ` 20,000 crore investment is likely to flow into

setting up new manufacturing capacity in the state, for

solar panels and other renewable energy equipments, skill

developments, and research and development for

sustainable clean energy, Ramapati said. State's Energy

Minister Bijendra Prasad Yadav said it is time for

organisations to invest in Bihar to accelerate the state's

development.

Source: The Economic Times

KSEB upbeat over normal monsoon forecast

June 15, 2017. Catchment areas of the hydroelectric

power projects in Kerala are yet to receive copious

southwest monsoon rains, keeping the storage levels well

below normal. With the storage as, 514 million units of

power can be generated. Normally, at the end of June, the

storage used to be enough to generate 795 million units,

the Kerala State Electricity Board (KSEB) said. The

current daily demand is at 62 million units and it is met

by hydel generation and imports from various sources.

Currently, 8 million units are generated daily from the

hydel sources, 27.8 million units come from the Central

grid and 21.3 million units from purchases. With

purchases from power exchange and deviations, the total

comes to 59.43 million units. The gap of 3.5 million units

is filled by wind mills and small hydro-electric projects in

the private sector, the KSEB said. The KSEB is in a

comfortable position and would avoid costly thermal

power from NTPC Kayamkulam and BSES Ernakulalm

this year.

Source: The Hindu Business Line

Rajasthan invites Japanese firms in solar energy

sector

June 15, 2017. Rajasthan Chief Minister Vasundhara Raje

invited Japanese companies to invest in solar energy

sector in the state. In her meeting with a delegation of

Japan External Trade Organization, she said solar energy

is the power of the future and Rajasthan is the ideal

destination for investment in Solar Energy.

Source: Business Standard

IOC set to foray into energy storage business

June 14, 2017. Indian Oil Corp (IOC) is planning to foray

into energy storage business. The firm is weighing the

option of launch of an improved version of lead-acid

battery for low cost mobility and industrial applications.

IOC’s foray into the energy storage market comes at a

time the government is working on an ambitious target

to ramp up renewable energy generation capacity to 175

GW by 2022 and also completely shift to e-vehicles by

2030. India added 5,526 MW of solar capacity during

2016-2017, a growth of 85 percent, and 5,400 MW of

wind capacity, 63 percent more than the capacity added

previous year. Analysts said IOC’s entry in the energy

storage market may invoke interest from the booming

renewable energy sector which is in need of indigenous

battery solutions but demand from the auto industry may

still take time to catch up. Currently, Mahindra Electric is

the only company manufacturing electric cars in India in

the passenger vehicle segment. The company

manufactures only 100 units per month due to low

demand but plans to ramp up production to over 1,000

units in the soon. In the two-wheeler space, Hero Electric,

Ather Energy and Lohia Auto are the few mainstream

players manufacturing electric vehicles. IOC is not the

only company diversifying its portfolio to enter into the

energy storage business. IOC has so far commissioned

167 MW of wind-power projects in Gujarat, Andhra

Pradesh and Rajasthan. The company's total installed

solar photovoltaic (PV) capacity stands at 20 MW. In

addition, the fuel retailer operates 6,170 fuel stations on

solar power with a cumulative capacity of 24 MW. The

energy storage market for rooftop and off-grid renewable

energy applications in India is likely to be worth ` 16,500

crore by 2022, Delhi-based Council for Energy

Environment and Water (CEEW) said.

Source: The Economic Times

India's renewable energy capacity crosses 57 GW

June 14, 2017. India is staying true to its ambitious

renewable energy targets by showing a steady growth in

renewable energy installations in India, which as of April

2017 account for 17.5 percent of the total energy source.

The latest data, which is provided by the ministry of new

and renewable energy, has been analyzed by Mercom

Capital Group. India's overall installed capacity has

reached 329.4 GW, with renewables accounting for

57.472 GW. The figures show a significant rise on the

data released by the ministry in February when the figure

stood at around 50 GW. In April 2017, solar reached 3.8

percent of total installed capacity up from 2.23 percent in

April 2016. Country's coal-fired fleet remains strong with

a 59 percent share in the total energy mix, although

NTPC has showed itself to be the principle supporter of

the government's green energy agenda. India has set a

target of reaching 170 GW of renewable energy capacity

by 2022, out of which 100 GW is to come from solar.

Source: The Economic Times

INTERNATIONAL: OIL

Alaska field hits 40 yrs of production

June 20, 2017. The BP-operated Prudhoe Bay oil field in

Alaska has reached 40 years of production, generating

more than 12.5 billion barrels of oil in the process. The

field continues to support more than 16,000 Alaska jobs

and supplies 55 percent of all Alaska oil output, BP

revealed. The original estimated recovery for Prudhoe

Bay was 9.6 billion barrels. However, an additional 3

billion barrels so far have been unlocked through

innovations in oilfield technology. While production has

fallen from historic peaks due to natural decline, Prudhoe

Bay remains the third-largest oil field in the US by proved

reserves, behind the Eagle Ford Shale and Spraberry

fields in Texas.

Source: Rigzone

Italy's Eni signs deal with Iran on oil and gas field

studies

June 20, 2017. Italian oil major Eni signed an agreement

with Iran for feasibility studies to develop an oil field and

a gas field, signaling a possible return to Iran's upstream

sector. Eni had signed a Memorandum of Understanding

with the National Iranian Oil Company for studies on the

Kish gas field and the third phase of the Darkhovin oil

field in southern Iran. Eni has six months to present the

results of its studies.

Source: Reuters

China's 2017 crude oil quotas exceed last year's,

teapots take a cut

June 19, 2017. China issued a second batch of crude oil

import quotas under the so-called "non-state trade" that

is higher than for all of the allowances in 2016, but

allotments to independent refineries were lower than a

year earlier. The lower grants to the independents dealt

the new group of crude oil buyers another blow because

they were already barred from exporting refined fuel,

squeezing margins in an oversupplied domestic fuel

market. The commerce ministry approved 22.92 million

tonnes to 32 companies, against 29 recipients in the first

issue for 2017. The 32 companies included mostly

independent oil refineries, also known as teapots, and

some state-run companies. That latest quotas take the

total issued this year to 91.73 million tonnes, compared

with 87.6 million tonnes in 2016. The second batch will

be valid until year-end. Volumes for the 19 independent

oil plants that make up two thirds of the total issues for

2017 dropped by 12.36 million tonnes, or nearly 17

percent, from last 2016.

Source: Reuters

Mexico auctions two-thirds of blocks in shallow

water oil tender

June 19, 2017. Mexico auctioned two-thirds of the

shallow water oil and gas blocks up for grabs in the latest

round of its energy market opening, surpassing the

cautious estimates officials made. Italy's Eni, Colombia's

Ecopetrol and Capricorn Energy, a unit of Edinburgh-

based Cairn Energy, were among the companies at the

forefront of the bidding for 15 blocks in the southern

Gulf of Mexico. Ten of the 15 blocks were taken up in

the auction. The potential output from the blocks

auctioned could total 170,000 barrels per day of crude

equivalent, and investments could eventually reach $8.2

billion, Energy Minister Pedro Joaquin Coldwell said.

Mexico hopes opening the energy sector will help reverse

years of declining crude output. Total crude production

in Mexico has fallen to 2.01 million barrels per day from

a peak of 3.38 million in 2004.

Source: Reuters

Oil market fundamentals heading in right direction:

Saudi Energy Minister

June 19, 2017. Saudi Energy Minister Khalid al-Falih said

the oil market is heading in the right direction but still

needs time to rebalance. Oil prices dipped, weighed down

by a continuing expansion in US (United States) drilling

that has helped to maintain high global supplies despite

an OPEC (Organization of the Petroleum Exporting

Countries) -led initiative to tighten the market by cutting

production. The price of oil is down around 14 percent

since late May, when producers led by the OPEC

extended their pledge to cut output by 1.8 million barrels

per day (bpd) by an extra nine months. Falih said there

was a relatively big draw of around 50 million barrels

from floating storage and a drop in industrialised nations'

onshore storage of 65 million barrels compared to July

last year. Compliance in April and May with the OPEC-

led output deal was above 100 percent, he said. Falih also

said he expects Libya's production to return to normal

levels. OPEC members Libya and Nigeria were exempted

from the supply cuts because unrest had curbed their

output.

Source: Reuters

Qatar won't cut gas to UAE: Qatar Petroleum CEO

June 18, 2017. Qatar will not cut off gas to the United

Arab Emirates (UAE) despite a diplomatic dispute and a

"force majeure" clause in its contract, the Qatar

Petroleum chief executive officer (CEO) Saad al-Kaabi

said. CEO said that although there was a "force majeure"

clause in the agreement on the Dolphin gas pipeline,

which links Qatar's giant North Field with the UAE,

Qatar would not stop supplies for other reasons. The

Dolphin gas pipeline links Qatar with the UAE and

Oman and pumps around 2 billion cubic feet of gas per

day to the UAE.

Source: Reuters

Russia's Rosneft finds first oilfield offshore eastern

Arctic

June 18, 2017. Russia's largest oil producer Rosneft said

it had found its first oilfield in the Laptev Sea in the

eastern Arctic, making a breakthrough in the search for

hydrocarbons in the harsh and far-flung region despite

Western sanctions. Rosneft and its partners plan to invest

480 billion roubles (6.57 billion pounds) in developing

Russia's offshore energy industry in the next five years,

part of a drive to boost output from new areas. The

company has sought tie-ups with several global oil players

to develop Russia's offshore regions. But a deal to work

in the Kara Sea in the western Arctic with U.S. company

Exxon Mobil was suspended in 2014 after the imposition

of Western sanctions against Moscow. The Arctic

offshore area is expected to account for between 20 and

30 percent of Russian production, one of the world's

largest, by 2050. Rosneft owns 28 blocks in the Arctic

offshore area with combined estimated resources of 34

billion tonnes of oil equivalent. There is only one

offshore platform in the Russian Arctic, Prirazlomnoye,

operated by Gazprom Neft, which plans to produce 2.6

million tonnes (52,000 barrels per day) this year. Analysts

said oil production in the region - apart from

Prirazlomnoye - is years away and may start only in the

mid-2020s Rosneft has been working in the Laptev Sea

since 2014. It values the hydrocarbon resources of the sea

at around 9.5 billion tonnes of oil equivalent.

Source: Reuters

UAE Energy Minister sees no need for extraordinary

OPEC talks

June 17, 2017. The United Arab Emirates (UAE) Energy

Minister Suhail bin Mohammed al-Mazrouei said he saw

no need for an extraordinary meeting of the Organization

of the Petroleum Exporting Countries (OPEC) ahead of

regular talks in November. OPEC holds its next regular

meeting in Vienna on November 30. OPEC and non-

members led by Russia decided on May 25 to extend cuts

in oil output by nine months to March 2018 as they battle

a global glut of crude. Mazrouei also said he expected

demand for oil to pick up in the third quarter of the year.

Source: Reuters

Exxon, partners set $4.4 bn for mega oil project in

Guyana

June 16, 2017. Exxon Mobil Corp said it and partners

would spend $4.4 billion to develop part of the Liza

oilfield off the coast of Guyana, approving a megaproject

at a time when the oil industry has grown obsessed with

lower-cost shale. Exxon's decision shows that oil

companies remain interested in large projects, especially

offshore, even in an era of belt-tightening after two years

of low crude prices. The Guyana announcement from

Exxon and partners Hess Corp and CNOOC was the

fifth deepwater project to gain approvals this year. BP Plc

and Reliance Industries Ltd (RIL) said they would spend

$6 billion to develop natural gas reserves off the Indian

coast. Exxon, which spent nearly $7 billion to more than

double its holdings in the Permian shale formation in the

United States, said the Guyana project was approved due

in part to its low cost of production. Phase One of the

Liza development project should tap about 450 million

barrels of oil and pump about 120,000 barrels per day

when it comes online in 2020, Exxon said.

Source: Reuters

Uganda to finalise oil exploration deal with

Nigerian firm

June 14, 2017. Uganda is set to sign two oil production

sharing agreements (PSAs) with a Nigerian firm, enabling

the company to begin exploration work, the government

said. The firm, Oranto Petroleum International, was

among a number of companies that bid in the country's

first competitive oil exploration licensing round last year,

with two other Nigerian firms and Australia's Armour

Energy also getting through to final negotiations for the

award of the PSAs. The ministry of energy and mineral

development said the deal with Oranto covers the Ngassa

Shallow Play and Ngassa Deep Play exploration blocks

located near the southern part of Lake Albert. Uganda

discovered oil in 2006 in the Albertine rift basin along its

border with the Democratic Republic of Congo. Gross

crude reserves are estimated by government geologists at

6.5 billion barrels of which between 1.4 to 1.7 billion

barrels are considered recoverable. Production is

expected to start in 2020. The first batch of licences that

Uganda awarded in the early 2000s were given on a first-

come, first-served basis. But after the discovery of

commercially recoverable reserves the country enacted

new laws to manage the sector and under those laws

exploration licences must be granted on a competitive

basis.

Source: Reuters

China's May oil output lowest on record

June 14, 2017. China's crude oil production fell to its

lowest on record in May, even as refineries in the world's

top buyer of crude churned out product at their fastest

pace in nearly two years, data showed. Crude output fell

3.7 percent in May from a year earlier to 16.26 million

tonnes, or 3.83 million barrels per day, data from the

National Bureau of Statistics showed. The figure is the

lowest since the bureau began publishing records in 2011.

The drop in China's crude oil output has slowed as major

oil producers raised spending to boost production as oil

prices have stabilized in a range between $48 to $55 per

barrel. Analysts are forecasting flat or positive production

growth for calendar 2017. PetroChina, the owner of

China's largest oilfield Daqing, said in December that it

would slash capital spending on the field this year by 20

percent from a year earlier.

Source: Reuters

Brazil's Petrobras cuts gasoline and diesel prices

June 14, 2017. Brazil's state-controlled oil company

Petroleo Brasileiro SA (Petrobras) reduced its average

prices at refineries by 2.3 percent for gasoline and 5.8

percent for diesel, the company said. The gasoline prices

for consumers may drop up to 0.9 percent and diesel

prices, up to 3.5 percent, the company said.

Source: Reuters

INTERNATIONAL: GAS

Shell Nigeria considering investment in gas project

in Niger Delta

June 20, 2017. Shell is considering whether to invest in a

gas project in Nigeria's southern Niger Delta energy hub.

Shell Petroleum Development Company of Nigeria

(SPDC) said the project under consideration would have

a capacity of 300 million cubic feet and would be located

in the city of Asa.

Source: Reuters

Snam in exclusive talks to buy LNG terminal stake

from Edison

June 20, 2017. Italian gas group Snam is in exclusive talks

with EDF's Italian unit Edison to buy a stake in a

liquefied natural gas (LNG) terminal in northern Italy as

part of plans to develop its LNG business. Snam is

looking to buy Edison's 7.3 percent stake in Terminale

LNG Adriatico and the gas pipeline that connects it to

Italy's gas transmission backbone. Adriatic LNG, which

has a capacity of 8 billion cubic metres per year, is 70.7

percent owned by ExxonMobil and 22 percent by Qatar

Petroleum. Exxon and Qatar have a pre-emption right on

Edison's stake. Snam, which makes most of its money

from gas transmission, is looking to play a leading role in

integrating Europe's grids and making Italy a European

gas hub.

Source: Reuters

Private producer aims to ship Baltic's first Russian

LNG before Gazprom

June 20, 2017. LNG Gorskaya, a privately-owned

Russian liquefied natural gas (LNG) producer, has

launched a €340 million ($379 million) project to become

the first LNG exporter from Russia's European coast.

Russia expects to send LNG to Europe by the end of

2017 from its distant Arctic peninsula of Yamal but a

plant on its Baltic coast could establish the country as a

more immediate supplier of LNG in a region already

dependent on piped Russian gas. The company will build

a floating LNG plant off the port of Gorskaya, not far

from Saint Petersburg, which will be fed by a 12 km

pipeline from Gazprom. The company had agreed to

build floating bunkering stations and storage facilities at

the Baltic ports that will be able to supply LNG-fueled

vessels with mostly Russian LNG by 2020. The company

said it had the acquired the necessary gas export permits

from Gazprom. The project means LNG Gorskaya could

deliver the Baltic's first large-scale, locally produced

Russian LNG three years ahead of Gazprom's Baltic

LNG project, a much delayed plan the state-owned gas

giant now expects to be running by 2023.

Source: Reuters

Qatargas, Shell sign LNG supply deal

June 20, 2017. Qatargas has agreed to supply up to 1.1

million tonnes of liquefied natural gas (LNG) per annum

to Royal Dutch Shell for five years. A new sale and

purchase agreement (SPA) signed by the parties will come

into effect from January 2019. LNG will be supplied from

Qatar Liquefied Gas Company 4 (Qatargas 4) which is a

joint venture (JV) of Qatar Petroleum and Shell. In the

JV, Qatar Petroleum holds 70% stake while Shell holds

30%, which was incorporated in 2007. The LNG is likely

to be delivered to the Dragon LNG Terminal located in

the UK or the Netherlands-based Gate LNG Terminal.

In March, Qatargas entered into an agreement to boost

the volume of its currently supplied LNG to PGNiG to

two million tonnes per annum. The agreement is slated

to come into effect on 1 January 2018 and will expire in

June 2034.

Source: Energy Business Review

Tunisia gas field protesters reach deal, production

to restart

June 16, 2017. Protesters blockading oil and gas fields in

southern Tunisia have reached an agreement with the

government to end a sit-in and allow production to

restart immediately, the government and protesters said.

Protests over jobs in southern Tataouine and Kebili

provinces hit oil and gas production in a region where

French company Perenco and Austrian producer OMV

operate. The deal calls for jobs in oil companies and

development projects. Protesters were pressing demands

for jobs and a share of the country's energy wealth and

forced the closure of two oil and gas pumping stations in

Kamour in Tatatouine and in Kebili.

Source: Reuters

JX Nippon starts gas production offshore Malaysia

June 15, 2017. JX Nippon Oil & Gas Exploration

(Malaysia) Ltd revealed that it has commenced

commercial gas production from the Layang field,

offshore Sarawak in Malaysia. The initial production of

natural gas and condensate from Layang, which is

situated in the JX Nippon operated Block SK10, is

estimated at around 12,000 barrels of oil equivalent per

day. Natural gas produced from Layang field, together

with natural gas from the Helang gas field, will be

supplied through subsea pipelines to the MLNG Tiga

Sdn. Bhd. liquefaction plant in Bintulu, Sarawak, which is

partly owned by JXTG Nippon Oil & Energy

Corporation. The natural gas will be sold as LNG after

liquefaction to its customers, including buyers in Japan.

Source: Rigzone

INTERNATIONAL: COAL

Rio Tinto recommends Yancoal coal offer over

Glencore

June 20, 2017. Rio Tinto selected Yancoal to buy its Coal

& Allied division in Australia for $2.45 billion, surprising

commodities trading giant Glencore, which had put in a

higher bid. Glencore offered $2.55 billion cash this

month for Rio's coal mines in the Hunter Valley region

of New South Wales, beating a previous offer from

Yancoal, which is based in Australia and owned by

China's Yanzhou Coal Mining Company. Glencore has

long sought Rio's high-quality thermal coal assets in the

Hunter Valley. Despite environmental concerns about

the carbon-intensive fossil fuel, Glencore expects

continued demand, especially in Asia, as coal can still be

the cheapest form of baseload power. Rio Tinto said

Yancoal had agreed to accelerate payments it had said it

would defer when it made its original offer in January.

Yancoal will also pay a royalty linked to coal prices.

Glencore said it had received clearance from Japan,

which would be the destination for much of the coal

involved.

Source: Reuters

China's coal futures forward curve turns bullish as

mercury rises

June 16, 2017. China's thermal coal futures rallied to a

record high, lifting September futures to a premium over

October, as a prolonged hot spell spurred power demand

and low water levels dented hopes of higher hydro output.

The buying lifted futures for delivery in September to a

premium of 6 yuan ($0.88) per tonne over October, in a

structure known as a backwardation, when prompt prices

are higher than those for later months, that reflects

tightening supplies. At the start of the month, the spread

had been in a 4 yuan contango. The new curve suggests a

brighter outlook for prices of the fuel most used to

generate power in China even as Beijing has tried to boost

supplies to avoid another crunch in supply that triggered

a historic rally in prices last year. Data showed miners in

May produced coal at their fastest pace in years ahead of

peak summer demand. Prompt coal prices for cargoes

from Australia's Newcastle export terminal, Asia's

benchmark, have shot up 18 percent since mid-May to

$84 per tonne. Total daily consumption from six of the

largest coal power plants rose to 622,400 tonnes per day

by June 16, up from 592,000 tonnes a month ago,

according to China Sublime Information Group.

Source: Reuters

Nippon Steel gives up coking coal pricing role as

influence wanes

June 16, 2017. Nippon Steel & Sumitomo Metal, Japan's

top steelmaker, has given up its decades-old role in setting

global coking coal prices because the rise of Chinese and

Indian rivals has weakened its influence over the market.

Nippon Steel stepped down as top negotiator on the

coking coal benchmark, also because wild swings in the

spot market played havoc with its profits, with gaps

between the benchmark and spot prices making it less

responsive to the market than rivals using index-linked

pricing. Japan bought 61.5 million tonnes of coking coal

in 2008, more than double India's 26.5 million and nearly

20 times China's 3.2 million. Last year, though, Japan

imported 53.4 million tonnes against India's 46.7 million

tonnes and China's 35.7 million, according to Clarksons

Research. Nippon Steel and other Japanese steelmakers

have long resisted the idea of more flexible pricing for

coking coal, preferring the stable supply and steady prices

of quarterly term contracts. Using the new pricing

formula - which sets prices based the spot price indexes

provided by S&P Global Platts, Argus Media and The

Steel Index - coking coal for the April-June quarter will

likely be set at around $190-195 a tonne, Nippon Steel

said.

Source: Reuters

China allows coal mines to increase capacity amid

price rally

June 16, 2017. China will allow some coal mines to

increase capacity, the National Development and Reform

Commission (NDRC) said, as Beijing ramps up efforts to

boost supply for summer. Both open pit and

underground mines will be able to apply to increase

production capacity as long as they haven't reported

major accidents, are efficient mines and follow strict

safety measures, the NDRC said. Producers in regions

that have complex geological conditions, are vulnerable

to firedamp accidents or have been required by the

government to cut capacity will not be eligible to apply.

NDRC's latest move came as China's coal futures prices

rose to a record high as warm weather leading into the

summer season raised investors' expectations for

increased demand. China's coal production rose 12

percent in May from a year ago, notching the fastest

growth pace in years, data showed. The NDRC said

producers granted quota increases would need to shut

down some old inefficient coal mines in exchange.

Source: Reuters

INTERNATIONAL: POWER

Southern California power supply at risk this

summer: FERC

June 15, 2017. Natural gas constraints in Southern

California could pose a risk to the region's power supply

this summer, while New England and Texas could face

tight electricity supplies, the United States (US) Federal

Energy Regulatory Commission (FERC) said. The

anticipated reserve margin in ISO New England, the

regional power grid operator, is forecast at 14.9 percent,

slightly below the target of 15.1 percent. The operator

could be forced to import additional power from

neighbouring regions in case peak summer conditions

materialize, as forecast, since the commissioning of about

700 MW of new resources could be delayed, FERC said.

In Texas, FERC forecast that reserve margins in the

Electric Reliability Council of Texas, which operates the

power grid for about 75 percent of the state, would

continue to be tight when compared to other regions,

even though the operator expects to have adequate

generating capacity to meet peak demand.

Source: Reuters

Australia faces potential summer power crunch,

market operator warns

June 14, 2017. Eastern Australia's power grid will be

stretched again if fierce heatwaves hit over the next two

summers, despite recent government steps to beef up

supply, the Australian Energy Market Operator (AEMO)

said. The latest outlook from the AEMO comes three

months after it warned that Australia's most populous

states face a gas shortfall from the end of 2018 that could

spark power or gas cuts to homes and businesses. The

AEMO said power supply should be adequate in normal

summer weather, assuming 140 MW of energy storage

backed by the South Australian and Victorian state

governments is in place, there are no planned generator

outages and three gas-fired generators return to service as

promised. The market will need more coal-fired power in

the state of New South Wales, more renewable power

and higher output from gas-fired generators to replace a

1,600 MW plant shut by France's Engie SA in

neighbouring Victoria in March. The grid would be most

vulnerable in extreme heat on weekday afternoons and

evenings when people switch on air conditioners, with

the risk rising if the wind drops and the sun is down or

other generation is disrupted at the same time, the

AEMO said.

Source: Reuters

INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE

TRENDS

Wind, solar energy have not harmed US power grid

June 20, 2017. With the Trump administration expected

to publish an analysis that could undermine the United

States (US) wind and solar industries, two renewable

energy lobbying groups released their own study saying

new energy sources pose no threat to the country's power

grid. Wind and solar advocates have said the government

study's outcome appeared to be pre-determined to favor

fossil fuel industries. The new report, commissioned by

the American Wind Energy Association and Advanced

Energy Economy, said cheap natural gas is behind most

of the decline in the numbers of US coal-fired power

plants in recent years, not government subsidies that have

bolstered the growth of wind and solar power. It also said

there is no evidence to show that wind and solar energy

are threatening the reliability of the electric grid. The

groups commissioned the report shortly after Energy

Secretary Rick Perry in April ordered a 60-day study of

the reliability of the grid and said Obama-era policies

offering incentives for the deployment of renewable

energy had come at the expense of energy sources like

coal and nuclear.

Source: Reuters

Tesla close to agreement on first production plant

in China

June 20, 2017. Tesla Inc is close to an agreement to

produce vehicles in China for the first time, giving the

electric-car maker better access to the world’s largest auto

market. The agreement with the city of Shanghai would

allow Tesla to build facilities in its Lingang development

zone and could come as soon. Details are being finalized

and the timing of the announcement could change. Tesla

would need to set up a joint venture with at least one local

partner under existing rules and it is not immediately clear

who that would be. Setting up local production is key for

Chief Executive Officer Elon Musk to continue growing

in China, where Tesla’s revenue tripled to more than $1

billion last year. Assembling vehicles locally would allow

the company to avoid a 25 percent tax that renders Model

S sedans and Model X sport utility vehicles more

expensive than in the United States (US). China has

identified new-energy vehicles as a strategic emerging

industry and aims to boost annual sales of plug-in hybrids

and fully electric cars 10-fold in the next decade.

Government support helped China surpass the US in

2015 to become the world’s biggest market for the non-

emission autos. Tesla, which made roughly 80,000 cars in

2016 and aims to boost it by about 7-fold to 500,000

annually by 2018. The automaker also plans to finalize

locations of up to three battery Gigafactories this year.

Source: Bloomberg

Carbon capture needed in climate change fight: IEA

June 19, 2017. Carbon capture and storage is gradually

gaining government attention after being overtaken by

investment in wind and solar energy, with the

International Energy Agency (IEA) saying the technology

will be crucial to limiting global warming. The IEA

estimates carbon capture and storage (CCS) will be

needed to cut 14 percent of the emissions that have to be

abated by 2060 to limit the global rise in temperature to

less than 2 degrees Celsius (3.6 degrees Fahrenheit). By

one estimate, $80 billion has been invested in renewable

energy compared with $20 billion in CCS, Australia's

ambassador for the environment, Patrick Suckling, said.

Efforts to expand carbon capture and storage include a

Japanese project to bury carbon dioxide below the seabed

off Hokkaido island and construction of China's first

large-scale carbon capture, utilisation and storage (CCUS)

project at a coal-to-chemicals plant run by Yanchang

Petroleum in Xian.

Source: Reuters

US Supreme Court hands Chevron victory in

Ecuador pollution case

June 19, 2017. The United States (US) Supreme Court

handed a victory to Chevron Corp by preventing

Ecuadorean villagers and their American lawyer from

trying to collect on an $8.65 billion pollution judgment

issued against the oil company by a court in Ecuador. The

justices turned away an appeal by New York-based lawyer

Steven Donziger, who has spent more than two decades

trying to hold Chevron responsible for pollution in the

Ecuadorean rain forest, of lower court rulings blocking

enforcement in the US of the 2011 judgment. While not

disputing that pollution occurred, San Ramon, California-

based Chevron has said it is not liable and that Donziger

and his associates orchestrated the writing of a key

environmental report and bribed the presiding judge in

Ecuador.

Source: Reuters

Sterling and Wilson bags solar project in Abu Dhabi

June 19, 2017. Sterling and Wilson said it has bagged

turnkey engineering procurement and construction along

with operation and maintenance contract for the world's

largest single location solar photovoltaic (PV) plant in

Sweihan, Emirates of Abu Dhabi. According to the

company, with construction already underway, the

prodigious plant, which is spread over a desert area of 7.8

sq km, is scheduled to be fully integrated with the grid in

a record timeline of just 23 months. The project was

awarded at the lowest ever recorded bid in the history of

PV solar. The plant is jointly developed by Marubeni, a

Japanese integrated trading and investment giant, along

with Jinko, a global leader in the solar industry, and Abu

Dhabi Water and Electricity Authority. The consortium

has successfully bid a tariff of $2.42 cents per kilowatt

hour, marking the lowest cost ever for solar power. The

plant, once commissioned, would save around 7 million

tonnes of carbon emissions every year, a number that

would be a national landmark.

Source: The Times of India

Stanford scientists develop wireless charger for cell

phones, electric cars

June 18, 2017. Scientists at Stanford University in the

United States (US) have developed a device that can

wirelessly charge a moving object at close range. The

technology could one day be used to charge electric cars

on the highway, or medical implants and cellphones as

you walk nearby. According to the study, published in the

journal Nature, wireless charging would address a major

drawback of plug-in electric cars -- their limited driving

range. A charge-as-you-drive system would overcome

these limitations. Professor Shanhui Fan said that a coil

in the bottom of the vehicle could receive electricity from

a series of coils connected to an electric current

embedded in the road. Mid-range wireless power transfer

is based on magnetic resonance coupling. The team

transmitted electricity wirelessly to a moving light

emitting diode (LED) light bulb but the demonstration

only involved a one milliwatt charge, far less than what

electric cars require. The scientists are now working on

greatly increasing the amount of electricity that can be

transferred, and tweaking the system to extend the

transfer distance and improve efficiency.

Source: Business Standard

South Korea retires oldest nuclear reactor on its 40th

birthday

June 16, 2017. South Korea's oldest nuclear reactor, the

40-year-old Kori No. 1, will halt operations, becoming

the country's first nuclear plant to close permanently

amid plans for a shift towards natural gas and renewables.

South Korea is the world's fifth-biggest consumer of

nuclear energy, and one of few countries to export its

technology, having won an order to build reactors in the

United Arab Emirates. But a scandal over forged

certificates for spare parts in 2012 and the 2011

Fukushima meltdown in neighbouring Japan have

undermined public support for nuclear power, while the

new left-leaning government aims to speed up plans to

move away from both coal and nuclear. Another 11 of

South Korea's 25 reactors are set to shut down by 2030

as they reach the end of their operating lives, although

some may push to have their operating licenses renewed.

With the country still setting its long-term energy plans,

it is unclear how many will be replaced by new reactors.

Since Kori No.1 began operations on June 19, 1977, the

587 MW reactor has generated enough electricity to meet

the entire country's current demand for around 100 days,

according to data from the Nuclear Safety and Security

Commission. The energy ministry estimated it will take at

least 15 years to fully dismantle Kori No. 1, at a cost of

about 644 billion won ($571 million). Some experts hope

that shutting the reactor may help South Korea catch up

to the United States, Japan and Germany in

decommissioning plants. The global decommissioning

market is expected to grow to about $980 billion by 2050,

according to a report by the Korea Atomic Energy

Research Institute.

Source: Reuters

Bulgaria accused of illegal aid to fossil fuel power

providers

June 15, 2017. Bulgaria has given €1.3 billion ($1.5 billion)

in illegal aid to coal-fired and other power plants,

according to a complaint filed with the European

Commission by London-based ClientEarth lawyer Sam

Bright. European Union (EU) state aid rules are designed

to support a shift towards a lower carbon economy,

though they allow some support for fossil fuel if it is

needed to prevent blackouts or if it cuts emissions by

improving efficiency. Bright said the activist lawyers had

spent more than a year investigating Bulgaria's practice of

requiring public power provider NEK and distribution

companies to buy all the electricity produced by plants

classified as "high-efficiency co-generation" that produce

heat as well as power. These operators are paid a

surcharge, which comes from a levy on consumer bills.

ClientEarth, whose campaigning successes include

exposing Britain's breach of EU air quality legislation,

said its research found the aid flouted EU rules and the

plants did not qualify for such help. In that complaint,

ClientEarth alleges four power plants, which will receive

permits to pollute worth €197 million between January

2013 and December 2020, had not met all the criteria to

qualify.

Source: Reuters

Global power sector emissions to peak in 2026

June 15, 2017. Global emissions of greenhouse gases

from the power sector are expected to peak in 2026, but

will still be some way above levels needed to limit

temperature rises in line with the Paris climate agreement,

research showed. Overall, $10.2 trillion will be invested

in new global power generation between 2017 and 2040,

with renewable power sources such as wind and solar

accounting for almost three quarters of that, a report by

Bloomberg New Energy Finance (BNEF) said. By 2040,

global emissions are expected to be 4 percent below

2016's levels, but an additional $5.3 trillion investment in

renewable power would be needed by 2040 to keep rising

global temperatures below 2 degrees Celsius (3.6 degrees

Fahrenheit). Under the 2015 Paris deal, more than 190

countries pledged to curb greenhouse gas emissions to

keep planet-warming well below 2 degrees to stave off

the worst effects of climate change. The report said the

costs of renewable power were expected to continue to

fall, with the cost of solar tipped to fall by 66 percent by

2040.

Source: Reuters

Nevada reinstates key solar energy policy

June 15, 2017. Nevada Governor Brian Sandoval signed

a bill to reinstate a key rooftop solar policy and bring

national residential installers Tesla Inc's solar division and

Sunrun Inc back to the state after an 18-month absence.

State legislators passed the bill, which requires utilities to

purchase excess power generated from rooftop solar

panels at near the full retail rate.

Source: Reuters

Trump administration to suspend rule on natural

gas waste

June 14, 2017. The Trump administration will suspend

compliance dates on a rule limiting methane emissions

from oil and gas companies working on public lands as

soon as, according to an Interior Department document.

The move is part of an effort by President Donald Trump,

a Republican, to roll back the environmental regulations

of former President Barack Obama, a Democrat. The

Environmental Protection Agency said it would propose

a two-year stay on another Obama methane rule requiring

companies to detect and capture leaking emissions.

Compliance dates on the rule on methane on public lands,

which the Obama administration issued in November

2016, will be suspended until a federal court in Wyoming

considers litigation on the regulation, the document said.

Source: Reuters

DATA INSIGHT Scenario of Solar Power Capacity vis-a-vis Total Renewables Generating

Capacity

Year Solar Power Capacity Addition Solar Power Cumulative Capacity

(MW)

Upto 2010 -- 11

2010-11 25 36

2011-12 994 1030

2012-13 656 1686

2013-14 946 2632

2014-15 1112 3744

2015-16 3019 6763

2016-17 (As on October 2016) 1965 8728

Trends in Solar and Total Renewable Generating Capacity

Source: Compiled from Central Electricity Authority & Press Information Bureau

15,52118,455

24,50327,542

31,702

35,777

42,849

50,745

11 36 1,030 1,686 2,632 3,7446,763

9,235

0

10000

20000

30000

40000

50000

60000

Upto 2010 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 (Ason

31.01.2017)

MW

Renewable Capacity Solar Capacity

This is a weekly publication of the Observer Research Foundation (ORF). It covers current national and

international information on energy categorised systematically to add value. The year 2017 is the fourteenth

continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper

for India under No. DELENG / 2004 / 13485.

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. Opinions are those of the authors

(ORF Energy Team).

Publisher: Baljit Kapoor Editorial Adviser: Lydia Powell

Editor: Akhilesh Sati

Content Development: Vinod Kumar Tomar

FACT FILE

The international crude oil price of Indian Basket as computed/published by Petroleum Planning

and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 43.85 per

barrel (bbl) on 22.06.2017. This was lower than the price of US$ 44.45 per bbl on previous

publishing day of 21.06.2017. In rupee terms, the price of Indian Basket decreased to ` 2828.16 per

bbl on 22.06.2017 as compared to ` 2871.41 per bbl on 21.06.2017. Rupee closed stronger at ` 64.50

per US$ on 22.06.2017 as compared to ` 64.60 per US$ on 21.06.2017. (PIB)

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