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Energy News Monitor

Jun 02, 2023

Production of liquefied petroleum gas (LPG) was initiated by Burmah-Shell and Stanvac, international oil companies operating in India in the 1940s and 50s. Burmah Shell started marketing operations for LPG in 1955 in Mumbai but it took another ten years for the release of the first LPG connection in Kolkata under the brand name Indane by the Indian oil corporation (IOC) which had by then taken over nationalised refineries of Burmah Shell. In the early 1970s, concerns over the safety of LPG use inhibited its adoption by households. For example, in 1970, IOC’s Indane LPG had only 235,000 registrations. It took almost three decades, a well-orchestrated media campaign and subsidies to increase registrations to 14.8 million. In the 1980s, domestic production of LPG was insufficient to cover the demand and extraction of propane and butane from large quantities of ‘associated gas’ and much larger quantities of ‘free gas’ from the Bombay and South Bassien fields were initiated. Specific budgetary provisions were made for setting up LPG extraction and bottling plants and also for marketing of LPG as fuel for cooking. Between 1970-71 and 2010-11, LPG production grew at an annual average rate of over 9.91 percent while consumption grew at 11.33 percent, the fastest growth rates among all petroleum derivatives including petrol and diesel. In 2010-11, imports met roughly 47.3 percent of the demand for LPG which has increased to over 64.2 percent in 2022-23. LPG imports accounted for the largest share of over 41.1 percent of petroleum product imports in 2022-23. Growth in demand for LPG is slowing down and supply challenges could add to the pressure on demand for LPG in India.

In 1970-71, domestic production of LPG amounted to 0.17 million tonnes (MT). Production of LPG grew by an annual average of over 13.3 percent in 1970-71 to 1980-85. In 1980-81 to 1985-86, production grew by an annual average of about 22.8 percent because in this period additional refining capacity came onstream, new cracking units were commissioned and LPG production from natural gas increased. Annual average growth in LPG production slowed down to about 3.11 percent between 1985-86 to 1995-96 but it increased to over 31.34 percent in 1995-96 to 2000-01 when the private sector refinery in Jamnagar came onstream. From 2000-01 to 2010-2011, LPG production grew by an annual average of just 2.1 percent and in 2010-2020 growth marginally increased to 2.2 percent. In 2020-21 to 2022-23, LPG production grew by an annual average of 3.1 percent. LPG accounted for about 5 percent of crude oil processing capacity in 2010-11 and in 2022-23 it fell to about 4.2 percent of processing capacity. Despite rising consumption, Indian refiners have not ramped up LPG production capability meaningfully. Indian refineries are more optimally designed to produce petrol and diesel and have lower LPG yields, which in turn limits domestic LPG production. With abundant LPG availability in international markets, thanks to increased production from the US, Indian oil companies are unlikely to dramatically increase LPG production in the future.

As domestic production of LPG is stagnant, imports have increased substantially to meet growth in demand. Import dependency for LPG has increased from over 41 percent in 2010-11 to over 64 percent in 2022-23. Private sector imports that accounted for roughly 7.8 percent of LPG imports in 2010-11 have fallen to zero in 2022-23. In 2012-13, countries in the Middle East accounted for over 99 percent of India’s LPG imports. In 2022-23, the share of the Middle East in India’s LPG imports fell to about 92 percent. Qatar, Saudi Arabia and United Arab Emirates (UAE) have remained the top three LPG import sources for India since 2012-13. In 2012-13, Qatar was the largest source of LPG imports to India but its share fell from 32 percent in 2012-13 to 27 percent in 2022-23 but it continues to be India’s top LPG supplier. Saudi Arabia was the second largest supplier of LPG to India in 2012-13 accounting for 25 percent of total imports but it fell to the third spot in 2022-23 with a share of 19 percent. UAE which was the third largest supplier in 2012-23 with a share of 21 percent has moved up to the second spot in 2022-23 increasing its share to 26 percent. In 2022-23, India imported 18.3 MT of LPG of value US$13.8 billion. LPG imports accounted for 41 percent of total petroleum product imports in terms of volume and 51 percent of total product imports in terms of value. Petroleum product imports account for about 24 percent of gross imports of India.

LPG is essentially a fossil fuel. Scope 1 emissions (direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by the producer of LPG) and scope 2 emissions of LPG (indirect GHG emissions associated with the purchase of imported energy and external energy inputs used by producer of LPG) are quite high as it is for most fossil fuels. Scope 3 emissions of LPG (emissions across the value chain starting with the procurement of the raw materials, through manufacturing, distribution and finally the customer use of the end product) are relatively low at the point of use compared to petrol and diesel. Scope 3 is where the largest percentage of emissions lie for oil & gas producers and typically are the hardest for producers to accurately quantify and track. Increase in import dependency for LPG can magnify the emissions challenge and undermine the goal of energy security. Energy security and emission challenges embedded in LPG supply and consumption in India can compromise achievement of sustainable development goal 7 (SDG 7) that aims to increase access to clean cooking fuels to all.

Most of the public sector producers and importers of LPG (ONGC, IOC, HPCL, BPCL and others) have committed to phase out scope 1 & 2 emissions by 2040-50. This will substantially improve the environmental credentials of LPG in the medium term but this may limit import of LPG from sources that have also committed to phase out scope 1 & 2 emissions. In the longer term, producers of LPG will have to invest in the production of renewable LPG (rLPG) using feedstock that include agricultural residues, energy plants, forest residues, mixed waste, algae, bio-oils, and ethanol. Globally small quantities of rLPG are being produced currently. However strong policy push and incentives will be required for replacing even a small fraction of energy derived from LPG with energy derived from LPG.

According to the Ministry of Coal, India has received bids from 22 companies, including Jindal Steel and Power and Hindalco Industries, for the commercial extraction of coal from 18 thermal and coking coal mines. As per the ministry, most of the mines have reserves of thermal coal used in power generation, while one has the variety used in the process of making steel. Half of the mines are fully explored and the others partially. The total capacity of the fully explored mines is 47.8 million tonnes per year (MTPA). The government wants private players to boost coal production in the country as power demand surges. Coal India Limited (CIL) dominates coal mining in the country.

The coal ministry has received 35 offline bids for 18 coal blocks under the 7th round of commercial coal mines auction. The seventh round of commercial coal mine auctions was launched by the ministry on 29 March this year for 106 coal mines. Of the total mines offered in the current round, 32 are new mines while 69 blocks are being rolled over from earlier tranches. The blocks are spread across Jharkhand, Chhattisgarh, Odisha, Madhya Pradesh, Maharashtra, West Bengal, Andhra Pradesh, Telangana, Rajasthan, Tamil Nadu and Bihar. As per the ministry action plan for FY24, it expects 25 coal blocks to be auctioned under the commercial mine auctions in the fiscal year. The ministry has signed agreements for 29 coal mines which were auctioned under the 6th round of commercial coal mines auction.

The Centre announced that it had issued allocation orders to successful bidders for 22 coal mines that had been put up for sale for commercial mining. While 16 coal mines have been fully explored, the remaining six have only been partially explored. The cumulative peak rated capacity (PRC) of 22 coal mines is 53 MTPA. The total geological reserve of six coal mines is 6,379.78 million tonnes (MT), and the blocks are expected to generate annual revenue of INR98.31 billion (bn) (US$1.19 bn) and attract capital investment of INR79.29 bn. It will, directly and indirectly, employ 71,467 people. With the allocation of these mines, the ministry has issued vesting orders for a total of 73 mines under commercial auctions with a total PRC of 149.304 MTPA.

After 2-3 years of prioritising coal imports along with ramping up domestic production, once again, India plans to reduce the import of coal. Union Minister for Coal and Mines Pralhad Joshi said the government plans to stop 107 MT of substitutable coal imports by FY 2025. Amrit Lal Meena, Secretary, Ministry of Mines, said that the 107 MT of imported coal is used in India’s non-regulated sector, which does not include domestic coal-based power plants. India produced 893 MT of coal in 2022-23, which is an increase of 55 percent from 2013-14 when domestic coal production was 572 MT. Joshi said the government will provide INR60 bn (US$727.4 mn) worth of viability gap funding (VGF) for coal gasification projects. This will be in addition to the plan of providing GST refunds, which Meena said is in the final stage of formalisation.

According to the Ministry of Coal, the overall coal stock in the country increased 44 percent year-on-year to 110.58 MT on 13 June. The ministry said the higher coal stock position indicates the commitment to maintaining an ample supply of the dry fuel — a key ingredient required for electricity generation. The ministry is focused on ensuring the energy security of the nation. It is actively working towards enhancing coal production and supply-efficient transportation of coal to all the stakeholders. The coal stock at pitheads of CIL as on 13 June stood at 59.73 MT, indicating a growth rate of 25.77 percent compared to 47.49 MT last year.

CIL is holding talks with residents opposed to a mine expansion that would create one of the world’s largest operations producing the fuel. Protests against plans for the Gevra site in Chhattisgarh threaten to complicate the company’s ability to win approvals to expand annual capacity to 70 MT. Output at that volume would see the site become the single biggest global source of the fossil fuel, according to CIL. Rising power demand has pushed India to prioritize energy security and boost output of coal, which continues to account for about 70 percent of electricity generation.

The government approved the continuation of the central sector plan ‘Exploration of Coal and Lignite scheme’ with an estimated expenditure of INR29.80 bn (US$361 mn). The time period for the extension is from 2021-22 to 2025-26 co-terminus with the 15th Finance Commission cycle, the Cabinet Committee on Economic Affairs (CCEA) said. Under this scheme, exploration for coal and lignite is conducted in two broad stages: (i) Promotional (Regional) Exploration and (ii) Detailed Exploration in non-Coal India Limited blocks. Exploration for Coal and Lignite is required to prove and estimate coal resources available in the country, which helps in preparing detailed project reports to start coal mining. The geological reports prepared through these explorations are used for auctioning new coal blocks, and the cost is thereafter recovered from successful allocatee.

CIL Chairman Pramod Agrawal said that the company should continue to remain as a “government entity” in the future to maintain “price stability” of the dry fuel in the country and suggested an alternative methodology for coal pricing in future. He said unlocking value cannot be the “sole” purpose of all enterprises. As a government-owned entity, CIL holds the responsibility of ensuring that the benefits of coal production are distributed to the public, he said. He said that the miner’s identity is synonymous with the country’s energy sector, and the present structure with CIL as the apex holding company is “strong and stable”. Coal prices of the Kolkata-based PSU are heavily discounted as compared to imported fuel. Under the leadership of Agrawal over three years from FY20, production and off-take for CIL surged by an additional 101 MT and 113 MT respectively, while supplies to the power sector were higher by 121 MT during the same period. The use of coal in the country is set to peak by the early to mid-2030s, amid the highest addition in renewable energy capacity among many global economies.

Around one dozen illegal coal mining tunnels were demolished in the deep forest area of Shikaripara block. The administrative team was led by district mining officer Krishna Kumar Kisku. A heavy contingent of security personnel of the district police force and the SSB were deployed at the site to thwart any attempts of the mining mafias to resist the drive.

The Supreme Court (SC) ruled that CIL, a public sector undertaking, and its subsidiary companies are covered under the Competition Act, 2002, and the competition watchdog Competition Commission of India can act against it for abuse of its dominant position in the coal sector. The Competition Commission of India (CCI) had held CIL guilty of abuse of dominant position in the production and supply of non-coking coal to thermal power producing plants in different states. The companies producing electricity from coal fired power plants had objected to CIL increasing the coal prices from INR1,631 (US$19.8) per metric tonne to INR 2,177 per metric tonne.

The High Court (HC) of Meghalaya asked the state government to look into allegations of illegal mining mentioned in a PIL (public interest litigation). The petitioner of a pending PIL had submitted before the court that two miners from Assam had died in a coal mine in South Garo Hills district and this was not reported in the newspapers. The petitioner said transportation of “illegally-mined coal continues merrily” in Meghalaya and even the death of two coal workers from Assam in the South Garo Hills district has gone unnoticed and not been reported in the newspapers in the state. The petitioner informed the bench that he had “video footage of the illegal mining activities and the transportation of the illegally-mined coal”. The bench directed Sangma to ensure that such video footage can be viewed in court when the matter is listed on 4 July for hearing.

On China’s frenetic and hugely popular retail livestreams, glamorous hosts sell goods ranging from shoes and lipsticks to baby products and, increasingly, truckloads of sulphurous coal. With coal inventories at China’s ports and power plants reaching record highs in recent weeks as a sluggish economy saps demand from utilities and steel mills, reducing the need for piles of cheap imported fuel, some miners are getting more creative in their customer outreach. In one recent stream by Huaze Coal Industry, a young woman in a blue hardhat and mining boilersuit, holding a lump of coal and superimposed onto a background of a coal warehouse, advertised powderised coal with an energy content of 5,500 kcal direct from the mine in Shanxi province at 570-600 yuan (US$79.55-US$83.73) per metric ton. By comparison, domestic thermal 5,500 kcal coal was traded at about 800 yuan (US$111.64) per ton. Three of the most active coal channels on Douyin -Huaze Coal, Guohai Daily Coal Price, and Jixing Coal – have together held 164 such online events so far this quarter, up from 120 events last quarter and 107 events in the fourth quarter of 2022.

South African coal miner Exxaro Resources expects its production and sales to decline in the first half of the year due to lower domestic demand, while persistent rail logistical problems continue to hobble exports. In an update, Exxaro said its coal production and sales volumes for the six months to June 30 are expected to decrease by 4 percent and 7 percent, respectively. Thermal coal prices have come off the record highs of 2022, when surging demand from Europe fired up coal miners’ earnings after a ban was imposed on Russian coal over Moscow’s invasion of Ukraine. The miner said the coal export price averaged US$127 per metric ton during the first half of 2023, less than half the average export price of US$265 per metric ton recorded during the same period last year.

At first sight, the latest Teck Resources chess move by Glencore is slightly confusing. Back in April the US$22 bn Canadian miner rejected the US$68 bn Swiss commodity giant’s merger offer, which planned to split the resulting entity into a separately listed coal company and a standalone metals company. While that approach still stands, Glencore said it has submitted a cash offer to buy only Teck’s coal unit. Teck’s coal arm is expected to make US$2.9 bn of EBITDA in 2024, according to analysts’ estimate polled by Refinitiv, which on the 3 times multiple at which its steelmaking coal peers trade implies an US$8.5 bn valuation. Yet Glencore is already offering cash for the coal arm in its punt for the whole company.

European Union (EU) countries failed to agree on planned new rules for the bloc’s power market, having clashed over a proposal to extend subsidies for coal plants under the reform, and a push to expand state aid for other power plants. Asked about the coal proposal, Swedish Energy Minister Ebba Busch said ensuring Poland, which borders Ukraine, had stable power generation could help it support Ukraine with back-up power. Poland, which gets around 70 percent of its power from coal, could prolong its support scheme for coal plants, potentially until 2028, under the proposal.

Eastern Germany’s historic mining belt could get a new lease of life thanks to plans to build the country’s largest battery park at the site of Boxberg, a communist-era coal-fired power plant on the Polish border. The project, unveiled by the Czech-owned mining and power company LEAG, involves building a €200 mn (US$218 mn) facility to store for wind and solar energy that will gradually replace the sprawling coal pits of the Lusatia region. They are to be built on some of the 33,000 hectares (330 square km) of former coal mines in Lusatia by 2030. The plans are emblematic of the drive by Chancellor Olaf Scholz’s government to accelerate the phase-out of coal power towards a carbon neutral economy by as early as 2030 versus the agreed target of 2038.

7 July: India’s fuel demand eased 3.7 percent in June month-on-month, government data showed, as monsoon rains restricted mobility in the world’s third-biggest oil consumer. Consumption of fuel, a proxy for oil demand, totalled 19.31 million tonnes (MT) in June, down from 20.06 million tonnes in May, the Petroleum Planning and Analysis Cell (PPAC) data showed. Sales of diesel, mainly used by trucks and commercially run passenger vehicles, decreased about 3.7 percent in June to 7.91 MT from a month earlier. In May, diesel sales hit an all-time high of 8.22 MT, as per PPAC data going back until 1998. Fuel demand in India, the world’s third biggest oil importer and consumer, typically falls during the four-month monsoon season beginning in June as parts of the country are hit by heavy floods. Gasoil, or diesel, accounts for about two-fifths of refined fuel consumption in India and is directly linked to industrial activity. Sales of gasoline, or petrol, were about 5.9 percent lower than the previous month at 3.15 MT. Cooking gas or liquefied petroleum gas (LPG) sales fell 4.9 percent to 2.23 MT and naphtha sales dropped 15 percent to 976,000 tonnes.

6 July: Hindustan Petroleum Corporation Limited (HPCL) hopes to operate its 15 million metric tonnes per year (tpy) Vizag refinery at full capacity early next year after commissioning some new secondary units geared to upgrade fuels. In March, the state-controlled refiner raised the crude processing capacity of the Vizag plant, located in Southern India, from 8.33 million tonnes per year by replacing an old unit with a new 9-million-tonnes-per-year crude unit in March. Refinery operations at full scale will increase HPCL’s crude imports and enable it to process fuel oil to produce expensive refined products such as gasoline and gasoil, helping boost the company’s profit margin. In two months, HPCL will commission a 3.5 million tpy hydrocracker, a sulphur recovery unit, and a hydrogen unit. A residue hydrocracker of similar capacity will also be commissioned by the end of this year. The two hydrocrackers will upgrade heavier feeds such as vacuum gasoil and bitumen into value-added fuels such as jet fuel, gasoline, and diesel. The residue hydrocracker will enable the processing of about 1 million tpy of fuel. The fuel oil imports could begin from the middle of 2024 “depending on economics”.

6 July: Indian Oil Corporation (IOC), Chennai, has committed to invest INR540 billion in various projects in Tamil Nadu in the next few years, including a 9 MMTPA (million metric tonnes per annum) grass-root refinery at an estimated cost of INR355.80 billion. This new refinery, which will come up on about 1,300 acres of land in Nagapattinam, will produce petrol and diesel for BS-VI specifications and also polypropylene. India’s largest fuel refiner and retailer has commenced blending bio-diesel with diesel at Sankari terminal and will be starting from Asanur soon, followed by Coimbatore.

10 July: Hindustan Petroleum Corporation Limited (HPCL) has received six or seven bids from industries to lease a part of its Chhara liquefied natural gas (LNG) import terminal on the west coast. HPCL aims to commission the terminal, with a planned capacity of 5 million metric tons per year (tpy) in the December quarter. HPCL was looking to lease capacity of 3 million tpy to other companies for a period of more than 10 years. The terminal was completed in March, but its commissioning has been delayed as a 40-km (25-mile) pipeline link to an existing network meant for sales to consumers is not yet ready. The terminal will run at about 30 percent of capacity in 2024 to reach full capacity in four or five years, he said, adding that HPCL has also made provision to double capacity to 10 million tpy in future. India is beefing up its gas infrastructure as Prime Minister Narendra Modi targets an increase in the share of natural gas in its energy mix to 15 percent by 2030 from about 6.5 percent now. India’s gas demand is picking up now, as prices have softened, Rao said, following a spike that had damped demand.

10 July: The domestic natural gas industry needs to take a holistic view of the sector to raise natural gas consumption in the country and meet demand when it reaches a critical level, the Petroleum and Natural Gas Regulatory Board (PNGRB) Chief Anil K Jain said. Jain said it will be difficult to imagine a gas-led energy system for India based on only domestic gas. The government wants to raise the share of gas in its energy consumption mix to 15 percent by 2030, up from the current 6 percent. The country currently imports about 50 percent of its gas requirements. India’s energy demand is rising 4-5 percent annually. Asserting that the dichotomy between domestic and imported gas has to go, Jain said a perceived difference between natural gas sourced domestically vis-a-vis imported Liquefied Natural Gas (LNG) is also splitting the market. Natural gas is shipped in its liquid form as LNG to LNG terminals. Regasification is the process of converting the LNG back to it’s gaseous state by heating it, after which it is transported through pipelines. Jain said the government expects good response for the upcoming bidding of license areas for both pipelines and CGD (city gas distribution). About 96 percent of the country has already come under CGD licensing. PNGRB has begun public consultation for the proposed pipeline in Jammu & Kashmir and sought comments from all stakeholders within a month on the route as well as carrying capacity. Jain said the country will need to see a second wave of investments into the building of infrastructure for the remaining two sectors where CGD is yet to penetrate – commercial and large industry.

10 July: Ace Energy Infrastructure, a part of Ace Pipeline Group, said it has completed tunnelling under the confluence of Kanamakra, Aie and Manas rivers in Assam as part of the Pradhan Mantri Urja Ganga project. The company completed a vital link in the Barauni-Guwahati natural gas pipeline being executed by GAIL (India) Limited in the Chirang District of Assam near Bongaigaon city, Ace Energy said. The construction crews are expected to install the 24-inch carbon steel pipeline to transport natural gas within this tunnel in the next few weeks. Once this is done, it will serve as a final link to complete a 1,600 km network of gas pipelines from Barauni to Guwahati and further to Numaligarh crossing major rivers such as Subhansiri and Brhamapura, it said. The Urja Ganga project aims to provide natural gas connectivity from Guwahati to Numaligarh and all towns and cities of the North-East.

6 July: India’s coal production picked up in “a big way” during FY22 and FY23 resulting into improved availability and supply of the dry fuel, on account of various government initiatives towards the sector, the ratings agency ICRA said. The production of Coal India Limited grew by 12.1 percent in FY23, the agency said. The government has taken various initiatives since January 2015. The policy interventions, especially with regard to the both captive and commercial coal mining have ushered in greater transparency and ease of doing business in the coal sector, the agency said. Prime Minister Narendra Modi launched the auctions for commercial coal mining in India in 2020 to increase the availability of coal in the country. As per the coal ministry data, so far, 86 coal mines have been auctioned under commercial coal mining, with a potential to generate INR341.88 billion in annual revenue to various states in the country. The coal production from captive and commercial coal mines have been steadily increasing over the years, registering a 216 percent growth in the last six years.

11 July: The state government has signed a Memorandum of Understanding (MoUs) with the government owned NTPC Limited aiming to enhance the power scenario in the northeastern state. The signing of MoUs with NTPC Limited come days after the Meghalaya High Court slammed the state government for failing to meet up more than 50 percent shortfall in electricity supply as a result of insufficient rainfall. Meghalaya power department said that the agreements with the NTPC Limited encompass the Power Portfolio Management Services (PMS) for Meghalaya, setting up of Pump Storage Power Plants (PSPs) and implementation of floating solar projects in the state. These strategic MoU marked a significant milestone in the collaborative efforts to uplift the power infrastructure and connectivity across Meghalaya. The PMS MoU between the Meghalaya government and the NTPC Limited would streamline the management and operations of supply of electricity in Meghalaya, ensuring efficient distribution of power and improved service delivery to the people.

10 July: The Aam Aadmi Party (AAP) launched a ‘Bijli Andolan’ from Panchkula with its supremo Arvind Kejriwal targeting the ruling BJP over alleged regular outages in Haryana and promising free electricity if voted to power. Free and uninterrupted power supply is possible if intent is clean, he said at an event also attended by Punjab Chief Minister (CM) Bhagwant Mann. During the ‘Bijli Andolan’ (electricity campaign), Aam Aadmi Party (AAP) workers and leaders will visit villages and towns and apprise people about “costly power” and regular outages and tell them that free and round-the-clock electricity is possible in Haryana too if the party is voted to power. Kejriwal said the country has the capacity to produce 4 lakh megawatt power as against demand of 2 lakh megawatt (MW).

9 July: Mumbai’s power demand is growing day by day and the latest estimates show the rise in electric vehicle (EV) charging stations and the introduction of new Metro lines in a year will push the demand by 150 megawatt (MW). Power experts said the government should push existing projects of transmission corridors to bring additional power to the city. One such project–the 400 kV Kharghar-Vikhroli line by Adani Transmission–is on the verge of completion before the year-end and is likely to bring 1,000 MW to Mumbai. Experts said all clearances and assistance should be given for expediting other transmission corridor projects, the Kudus Aarey transmission corridor by Adani Transmission (1,000 MW) and the Mumbai Urja Marg by Sterlite Power (2,000 MW). Mumbai’s peak power demand has been recorded at 4,129 MW and is expected to increase to 5,000 MW by 2025, requiring additional transmission corridors to meet the rising demand.

5 July: Delhi Lieutenant Governor V K Saxena has declared electricity as an “essential service” and extended the ban on strikes by employees and engineers of firms engaged in the supply and distribution of electricity in the national capital. The ban on strikes by electricity employees was extended for six months up to 3 January 2024. The home department of the Delhi government said that the Lieutenant Governor declared the services of electricity employees and engineers of BSES Rajdhani Power Limited, BSES Yamuna Power Limited, Tata Power Delhi Distribution Limited, Delhi Transco Limited, Indraprastha Power Generation Company and Pragati Power Corporation, engaged in the supply and distribution of electricity, as “essential”. The last notification in this regard was issued on 2 January, which banned any strike by power employees up to 3 July.

11 July: Renewable energy solutions provider Suzlon Group has bagged order for a 47.6 MW wind power project from KP Group in Gujarat, the company said. The project, located at Vagra in Bharuch district in Gujarat, is expected to be commissioned in 2024. A project of this size can provide electricity to 36,000 households and curb 1.42 lakh tonne of CO2 emissions per year, it said. Every Suzlon turbine ranging over 80-90 percent on domestic content and manufactured in the country through a thriving domestic value chain is a testament to our contribution to the vision of an Aatmanirbhar Bharat.

7 July: Reliance Industries (RIL) and Adani Total Gas Limited (ATGL) have announced plans to establish 10 compressed biogas (CBG) plants each across India. These plants will have a capacity of up to 30 million tonnes per annum. The companies will invest up to INR25 billion each to set up these plants. Both RIL and ATGL have already identified several sites for the plants. The construction of five plants is scheduled to take place within the next five years, while the remaining plants will be set up at a later stage. RIL will establish five CBG plants in Gujarat, with the other five to be distributed across the country. Currently, there is an ongoing development of a plant in Uttar Pradesh with a daily capacity of 600 tonnes, expected to commence CBG production by the end of the current financial year.

5 July: Enphase Energy announced the partnership with India-based financial technology start-up Credit Fair to expand the market share of its microinverter-based rooftop solar system by offering proprietary loan and financing terms for both B2B and B2C projects. This collaboration will support Enphase’s large network of solar distributors and installers across India. Customers can access the company’s premium solar solutions via Easy Monthly Instalment (EMI) payments. Over the recent years, Enphase has established a world-class research and development center in the Bengaluru city of Karnataka, where its flagship IQ series microinverters are manufactured. Enphase grows presence in India by offering flexible solar financingEnphase Energy has partnered with the Indian fintech Credit Fair, launching unique financing options to boost the uptake of their cutting-edge solar solutions across.

6 July: Organization of the Petroleum Exporting Countries (OPEC) will likely maintain an upbeat view on oil demand growth for next year when it publishes its first outlook later this month, predicting a slowdown from this year but still an above-average increase. OPEC’s forecast for 2024 will likely be lower than the growth it expects for this year of 2.35 million barrels per day, or 2.4 percent, an abnormally high rate as the world moves out of the coronavirus pandemic. Even so, it would still be well above the annual average of the past decade with the exception of the pandemic years and above predictions by the International Energy Agency (IEA), which sees a major slowdown in demand growth next year to 860,000 bpd. OPEC and the IEA have repeatedly clashed in recent years, with OPEC criticising the IEA, which advises industrialised countries, for what it sees as irresponsible predictions and subsequent data revisions. Oil demand growth is an indication of likely oil market strength and forms part of the backdrop for policy decisions by OPEC and its allies, known as OPEC+. The group in June extended supply curbs into 2024 to support the market as concern over weakening demand pressured prices.

6 July: Oil prices were near flat as the market weighed tighter US (United States) crude supplies with the higher likelihood of a US interest rate hike that could dent energy demand. Brent crude futures settled 13 cents lower at US$76.52 a barrel, after a 0.5 percent gain the previous day. US West Texas Intermediate crude gained 1 cent to US$71.80 a barrel, after rising 2.9 percent in post-holiday trade to catch up with Brent’s gains. Top oil exporters Saudi Arabia and Russia announced a fresh round of output cuts for August. The total cuts stand at more than five million barrels per day (bpd), equating to 5 percent of global oil output. The cuts, along with a bigger than expected drop in US crude stocks, provided some support for prices.

10 July: TotalEnergies and local producer Sonatrach agreed to hike natural gas production in Algeria, the French company said. The two companies had also extended their partnership in the field of liquefied natural gas (LNG). The combined production of two gas fields in the country is now expected to exceed 100,000 barrels of oil equivalent (boe) per day by 2026, versus a level of around 60,000 boe per day in 2022, TotalEnergies said. Sonatrach had announced the agreement. Under a second agreement, Sonatrach and TotalEnergies have also extended until 2024 their partnership for LNG deliveries of 2 million tonnes per year towards the port of Fos-Cavaou, near Marseille.

10 July: Oil major BP agreed to pay a civil penalty of US$10.75 million to cover allegations company traders manipulated natural gas markets in 2008, which is less than BP has already paid in the case, US (United States) energy regulators said. The US Federal Energy Regulatory Commission (FERC) alleged that BP violated the Natural Gas Act by manipulating the next-day

10 July: A coming wave of North American liquefied natural gas (LNG) export projects faces staffing challenges that are prompting some of the biggest developers to expand training and coordinate projects to keep construction workers. There are eight export projects now under way that when completed would add 86 million tonnes per annum (MTPA) capacity of the chilled natural gas. The projects have already created thousands of construction jobs and are soon to employ hundreds of operators. Paul Marsden, head of Bechtel Corp’s Energy global business unit, which has built 30 percent of the world’s LNG plants in the last 20 years, said industry, labor and education must work together to provide the training and workers to staff all the projects. In the past, soaring construction costs in US (United States) LNG projects hurt project economics and even led to bankruptcy for one major contractor, Rapidan Energy Group said. Bechtel is developing projects with some 27 MTPA of new capacity, including Sempra’s Port Arthur LNG project and an expansion at Cheniere Energy’s Corpus Christi plant, with an additional 29 MTPA waiting for formal approvals to move ahead. At present Bechtel has more than 3,000 professionals working on its LNG projects. At peak, the company expects the number to grow to close to 20,000 craft professionals. Cheniere Energy, one of Bechtel’s largest customers and the biggest LNG exporter in the US, has scheduled its construction so it can move existing workers from the Corpus Christi expansion to its next project when that gets going, to ensure it does not lose workers. Two other projects – Golden Pass LNG and Plaquemines LNG – have added workers and are moving to 24-hour work schedules. LNG Canada, located in Kitimat in a remote corner of British Columbia, invested more than C$5 million (US$3.74 million) in training including at local colleges, the company said.

7 July: China’s coal inventories are so bloated and coal prices so depressed that some of the country’s miners have cut production and called for a halt to imports, despite a scorching heatwave stoking power demand for cooling. Scarred by a coal supply crunch and power crisis in 2021 and wary of energy insecurity risks triggered by the Ukraine war, Beijing urged miners to boost production, approved new mines and encouraged imports, which has led to record stockpiles. That has driven benchmark prices for thermal coal with energy content of 5,500 kilocalories at northern Chinese ports down 30 percent so far this year to about 850 yuan (US$117) a metric ton. In some regions, spot prices have fallen below the prices agreed by miners and utilities for long-term contracts, prompting power generators to default on coal purchases even as electricity demand soars amid a heatwave. Thinning profit margins and mounting inventories are forcing miners to scale down production, according to coal traders and China Coal Transportation and Distribution Association (CCTD) data. Average operation rates at 442 major mines in provincial coal hubs Shanxi, Shaanxi and Inner Mongolia dropped to 82 percent in June from 84 percent in May, CCTD data showed. In May, China’s daily coal output fell to the lowest level since October 2022, however output over the first five months of 2023 hit a record 1.9 billion metric tons of coal.

5 July: Australia’s Whitehaven Coal said an environmental court in New South Wales (NSW) dismissed proceedings initiated by an activist group to invalidate the state’s consent to extend the miner’s Narrabri Stage 3 project. In April last year, Australia’s top independent coal miner received the “state significant development consent” from NSW’s Independent Planning Commission for the project, which would extend the life of the Narrabri underground mine to 2044. The coal miner has also joined a separate lawsuit challenging Federal Environmental Minister Tanya Plibersek’s decision that the Narrabri Stage 3 underground mine would not substantially damage the environment.

10 July: The Iraqi electricity ministry has said that Iraq lost 5,000 megawatt (MW) of electricity because of a shortage of gas supply by Iran. The loss of nearly 5,000 MW caused by the decline in gas supplies from Iran and the gap of 10,000 MW because of insufficient national gas production have negatively affected the electricity supply to citizens, the ministry said.

9 July: China’s Chengdu, capital of Sichuan province, is shoring up the city’s electricity supply for the FISU Summer World University Games as power grids across the country get stretched to their limits due to sweltering heat. A power supply command-and-dispatch centre began operations in June for the Chengdu Universiade, which will run from 28 July to 8 August. The centre has real-time monitoring capabilities, enabling it to gather information on electricity consumption at various points, encompassing lighting, microphones and power sockets. The system will monitor electricity consumption data of 49 venues and will also have the ability to allocate power resources across the region. Many parts of China have seen extremely high temperatures over the past several weeks, which has driven up electricity demand for cooling. Weather forecasters have put out persistent heat warnings and advisories, and governments have asked citizens and businesses to curb electricity consumption.

11 July: The United Arab Emirates (UAE) has updated its national climate pledge under the Paris Agreement to cut emissions by 40 percent by 2030, raising its target from 31 percent, the climate ministry said. The plan is part of a third update of the UAE’s second Nationally Determined Contribution (NDC), it said.

9 July: High in the Austrian Alps, hundreds of construction workers toil in a huge underground project aimed at storing hydropower as climate change has reduced the country’s water-dependent electricity production. Austria draws more than 60 percent of its electricity output from the renewable energy source, compared to a global average of 16 percent, with more than 3,100 dams spread across its rivers. But the amount of electricity generated through hydropower in the European Union country is down — from some 45 terawatt hours (TWh) in 2020 to 42 TWh in 2021 — as water levels are falling. Europe should brace for more deadly heatwaves driven by climate change, the World Meteorological Organization and the European Union’s Copernicus Climate Change Service report said. The report noted the world’s fastest-warming continent was some 2.3 degrees Celsius hotter last year than in pre-industrial times. Austria, which aims to draw all of its electricity from renewable energy by 2030, has been slow to develop wind and solar power, which make up only 13 percent of its electricity.

6 July: Pan-African infrastructure investment platform Africa50 and the International Solar Alliance (ISA) signed a Memorandum of Understanding (MoU) to support and finance solar projects in Africa. This partnership advances the organisations’ mutual goal of increasing the deployment of solar, to improve energy access, ensure energy security, and drive the energy transition around the world. The two organisations will also engage in mutual capacity building and seek to leverage each other’s networks to mobilise funding and raise awareness of African solar projects in European and Indian markets.

6 July: In addition to supercharging the United States (US) solar, wind and EV industries in the near term, incentives in President Joe Biden’s landmark climate law are paving the way for still-nascent technologies to help bring down global greenhouse gas emissions in decades to come. Buoyed by provisions in the Inflation Reduction Act, three emerging technologies — sustainable aviation fuel, clean hydrogen and direct air capture — could reduce carbon emissions by 99 million to 193 million metric tons per year after 2030, roughly equivalent to the carbon emissions of, respectively, Virginia or Pennsylvania in 2020, according to the research firm Rhodium Group.

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 2023 is the twentieth continuous year of publication of the newsletter. The newsletter is registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485.

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Quick NotesLiquefied petroleum gas: Supply challenges in India BackgroundProduction of LPGSource:ImportsIssuesSource:Monthly News Commentary: CoalDomestic Coal Production to Increase to Meet Power DemandIndiaCoal Block AuctionsImportsProductionPricesGovernanceRest of the WorldChinaAfrica & Middle EastNorth & South AmericaEuropeNews Highlights: 5 – 11 July 2023National: OilIndia’s fuel demand slips in June on monsoon lull7 July: HPCL aims to run Vizag refinery at expanded capacity from early 20246 July: IOC to invest INR540 bn in projects including Tamil Nadu refinery6 July:National: GasHPCL receives bids to lease part of Chhara LNG terminal on west coast10 July:Hard to imagine gas-led economy based only on domestic supply: PNGRB Chief10 July:Ace Pipeline completes tunnelling across major rivers in Assam for gas project10 July: National: CoalIndia’s coal production increased in big way from FY22-FY23: ICRA6 July: National: PowerMeghalaya government signs MoU with NTPC to enhance power scenario11 July:AAP’s ‘Bijli Andolan’ in Haryana, Kejriwal promises free power if voted to power10 July:New Metro lines, EV charging points to push up Mumbai’s power demand by 150 MW in a year9 July:Delhi Lieutenant Governor declares electricity as ‘essential’ service, bans strike by power employees5 July: National: Non-Fossil Fuels/ Climate Change TrendsSuzlon bags 47.6 MW wind energy project from KP Group in Gujarat11 July: RIL, ATGL Plan to set up 10 CBG plants each across the country7 July: Enphase grows presence in India by offering flexible solar financing5 July: International: OilOPEC upbeat over 2024 oil demand outlook despite slowdown6 July: Oil near flat as tighter supplies offset US rate hike risk6 July:International: GasTotalEnergies confirms deal with Sonatrach to increase Algerian natural gas production10 July:BP settles US natural gas market manipulation case for US$10.75 mn10 July:Next wave of North American LNG export projects to face labor challenges10 July:International: CoalChina miners seek coal import curbs to ease glut7 July:Lawsuit against Whitehaven Coal’s Narrabri Stage 3 extension consent dismissed5 July: International: PowerIraq loses 5 GW of electricity as Iran reduces gas supplies10 July:China’s Chengdu bolsters power supply ahead of international games, looming heat9 July: International: Non-Fossil Fuels/ Climate Change TrendsUAE raises 2030 emissions cut target to 40 percent11 July:Climate change challenges hydropower-dependent Austria9 July:Africa50 and ISA sign MoU to source and finance solar projects across Africa6 July:US President Biden’s climate law will supercharge emerging green tech globally6 July:Disclaimer:Publisher:Editorial Adviser:Editor:Content Development: