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India’s Petronet calls Dahej regas tariff “reasonable”

  • : Natural gas
  • 24/10/25

India's state-run LNG terminal operator Petronet LNG has called its regasification tariff as "reasonable" at its 17.5mn t/yr Dahej terminal on the west coast after consumers' concerns that the firm was charging one of the highest rates in the world, it said in a press conference.

Petronet charges 62.91 rupees/mn Btu ($0.75/mn Btu) to regasify the fuel received at its Dahej terminal, the country's largest such facility, with plans to increase it by 5pc every year.

But the firm also expects an "upward revision" to the rates going ahead, it said in a separate analyst call on 24 October.

The tariff is part of the contractual obligation of capacity booking of customers, the management said, adding that the demand for natural gas in the country is not determined by regasification charges, but instead driven by international gas prices.

"Even if you tweak it by 5pc or 10pc, that is not going to change the consumer pattern of natural gas," chief executive officer Akshay Kumar Singh said in the press conference.

The higher tariff at Dahej terminal also compensates for lower capacity utilisation at Petronet's 5mn t/yr Kochi terminal, the board explained.

The Kochi terminal has kept its capacity utilisation below 25pc since its commissioning in 2013, but the board expects the situation to improve in the coming years as the 16mn m³/d Kochi-Bangalore pipeline comes online by March 2025.

Additionally, the country's gas regulatory board Petroleum and Natural Gas Regulatory Board (PNGRB) plans to lay a new pipeline south from Kochi, it announced in a separate statement issued on the same day. The bidding for the pipeline closes on 18 February 2025, the regulator added.

The new project will take years to be ready, Petronet CEO Akshay Kumar Singh said in the earnings call.

The southern 425-km long Kochi-Kanyakumari-Thoothukudi gas pipeline would be the crucial link between Petronet's Kochi and state-run refiner Indian Oil 5mn t/yr Ennore LNG import terminal, according to the pipeline regulator.

The proposed pipeline, which has an initial capacity of 6mn m³/d, will begin from the southern state of Kerala before entering the neighbouring state of Tamil Nadu, where Indian state-controlled refiner IOC's Ennore facility is located. The pipeline will enhance the availability of natural gas in the southern part of the country, further supporting the development of the city-gas distribution business in the region, the regulator added.

Most of the country's existing gas pipeline infrastructure is in the western and northern parts of the country.

Kochi LNG has a 1.44mn t/yr long-term agreement for LNG from Australia's Gorgon LNG project. It may sign more term contracts for the fuel once the pipes are laid.

Capacity expansion plans

Petronet remains committed to commissioning the expanded 5mn t/yr capacity addition at Dahej, Singh said, adding that this would take the entire capacity of the terminal to 22.5mn t/yr by March 2025.

Petronet commissioned two storage tanks, each with a capacity of 180,000 m³ at Dahej in September, taking the total to eight storage tanks. The company is also in the process of building a 2.5km jetty that can accommodate Q-Max LNG tankers as well as receive propane and ethane beside LNG, Singh added.

Petronet also plans to build a new 5mn t/yr import facility in Gopalpur on the east coast, with commissioning expected by 2027, Singh said. The company is in the final stages of acquiring land from the Odisha state government and has sought bids to build a jetty, Singh said. It had previously planned for a 4mn t/yr floating storage and regasification unit but had to abandon the idea after demand for the units rose following Europe's LNG terminal capacity additions to compensate for cuts in Russian gas supplies.


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24/12/13

Canada sets 2035 emissions reduction goal

Canada sets 2035 emissions reduction goal

London, 13 December (Argus) — Canada has set a new 2035 climate goal, aiming to reduce its greenhouse gas emissions by 45-50pc by 2035, from a 2005 baseline. This builds on its 2030 target of a 40-45pc emissions reduction, again from 2005 levels. Canada's emissions had been in 2015 projected to rise by 9pc by 2030, from 2005 levels, "but we are now successfully bending the curve", the Canadian environment and climate change ministry said. The newly-announced target is in line with a pledge Canada made at the UN Cop 29 climate summit last month. Countries that are party to the Paris climate accord must submit new national climate plans by 10 February 2025, to cover a timeframe up to 2035. Canada, the EU, Mexico, Norway and Switzerland committed at Cop 29 to set out new plans with "steep emissions cuts" that are consistent with the global 1.5°C temperature increase limit sought by the Paris Agreement. The plans are known as nationally determined contributions (NDCs). Canada's NDC is being considered by the cabinet, and the country plans to submit it by the deadline, Canadian climate change ambassador Catherine Stewart told Cop 29 delegates on 21 November. Tackling climate change is "both an environmental imperative and an economic opportunity", she added. The target was informed "by the best available science, Indigenous Knowledge, international climate change commitments, consultations with provinces and territories and expert advice", the ministry said. Canada will also "seek feedback on how to help companies take advantage of the economic opportunities that come with building a clean economy" in the near term, it added. Although the plan is not yet available, the ministry said that it will examine the role of carbon removal technologies for the energy transition. "Canadians are increasingly experiencing record-breaking extreme weather," the ministry noted. The country experienced record wildfires in 2023. Carbon emissions from wildfires this year were second only to the "unprecedented" levels in 2023, EU earth-monitoring service Copernicus found this month. Canada has a legally binding target of net zero emissions by 2050. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India's Gujarat Gas raises PNG prices in Morbi cluster


24/12/13
24/12/13

India's Gujarat Gas raises PNG prices in Morbi cluster

Mumbai, 13 December (Argus) — India's state-run city gas distribution company Gujarat Gas has increased prices of piped natural gas (PNG) in the Morbi industrial cluster in west India's Gujarat state. This came after it kept rates unchanged since July. Prices of PNG used in the industrial ceramic cluster have been hiked to 46.95 rupees/m³ ($0.55/m³) from Rs44.68/m³ in July. This comes to Rs5.60/kcal on an energy equivalent basis, based on a calorific value of 8,400 kcal/kg. This is slightly higher than propane prices, which is a competing fuel in the region's ceramic cluster. Propane prices in Morbi were pegged at Rs61/kg for December , up from Rs60.30/kg in November because of rising import costs. Propane on an energy equivalent basis is Rs5.50/kcal based on the calorific value of 11,100 kcal/kg, traders said. Gujarat Gas has regained some market share in the last few months by keeping its prices unchanged. But it remains to be seen if ceramic units in the region will switch back to propane again. Propane demand in the region fell to 3.2mn m³/d in November from 4.5mn m³/d in October, regional traders said. Overall gas demand in the region was 7mn m³/d in November. Capacity utilisation of ceramic clusters continues to remain weak because of lower export demand for the upcoming Christmas season in the west, according to traders in the region. Gujarat Gas competes with regional propane distributors, including state-controlled IOC, BPCL and HPCL, as well as private-sector firms Reliance Industries, Aegis Logistics and Gogas. It remains to be seen if propane prices will rise further next month, as Saudi Arabia's state-controlled Aramco kept its December propane contract price unchanged at $635/t. Spot LNG prices have also risen this month, which makes a fall in PNG prices unlikely. The Argus -assessed spot price of LNG delivered to India's west coast for first-half January stood at $14.09/mn Btu on 12 December, up from $12.70/mn Btu a month earlier for December-arriving vessels. Tile manufacturers in Morbi have been switching between PNG and propane depending on LNG import prices, since the latter rose in 2022 as a result of the Russia-Ukraine war. By Rituparna Ghosh Propane vs PNG prices (Indian rupees/kcal) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US inflation rises to 2.7pc in November


24/12/11
24/12/11

US inflation rises to 2.7pc in November

Houston, 11 December (Argus) — Headline US inflation ticked higher in November, largely on food and shelter costs, suggesting the Federal Reserve still has work to do to reach its inflation target. The consumer price index rose by an annual 2.7pc in November after rising by 2.6pc through October, the Labor Department said. The gain matched expectations in a survey of economists by Trading Economics. So-called core inflation, which strips out more volatile food and energy, rose by 3.3pc, matching the prior month's gains. Services less energy services rose by 4.6pc following a 4.8pc increase the prior period. Today's report is the last consumer price index (CPI) reading before Federal Reserve policymakers meet next week to assess progress in bringing down inflation to their 2pc long term goal and release economic projections. The CME FedWatch tool today gave a 96pc probability the Federal Reserve will cut its target rate by a quarter point at its last meeting of the year, up from nearly 89pc Tuesday. The Fed began cutting its target rate in September after holding it at a 23-year high for more than a year. The energy index contracted by 3.2pc for the 12 months ending in November after falling by 4.9pc through October. Gasoline fell by 8.1pc and the fuel oil index declined by 19.5pc. The food index rose by 2.4pc over the past year, following a 2.1pc gain through the prior month. Transportation services rose by 7.1pc. Shelter slowed to 4.7pc from 4.9pc The CPI rose by 0.3 in November from the prior month, after rising by 0.2pc in each of the prior four months. The shelter index rose by 0.3pc for the month, accounting for nearly 40pc of the total monthly gain in the headline index, Labor said. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Brazil's inflation accelerates to near 5pc in November


24/12/10
24/12/10

Brazil's inflation accelerates to near 5pc in November

Sao Paulo, 10 December (Argus) — Brazil's headline inflation accelerated to a 14-month high in November, led by gains in food and transportation, according to government statistics agency IBGE. The consumer price index (CPI) rose to an annual 4.87pc in November from 4.76pc in the previous month, IBGE said. Food and beverage costs rose by an annual 7.63pc in November, accounting for much of the monthly increase, following a 6.65pc annual gain in October. Beef costs increased by an annual 15.43pc in November following an 8.33pc annual gain for the prior month. Higher beef costs in the domestic market are related to the Brazilian real's depreciation to the US dollar, with the exchange rate falling to a record-low R6.11/$1 at the end of November. The stronger dollar leads producers to prefer exports over domestic sales. Beef prices rose by 8pc for the month alone. Soybean oil prices rose by 27.75pc over the year. Transportation costs, another major contributor to the monthly acceleration, rose by an annual 3.11pc in November after a 2.48pc gain in October. On a monthly basis, transportation costs rose by 0.89pc in November, reversing a contraction of 0.38pc in October. Housing costs rose by 4pc over the 12-month period. Brazil's central bank last month hiked its target rate to 11.25pc, its second increase off a low of 10.5pc between May and September, to try to head off a resurgence in inflation. It was at a cyclical peak of 13.75pc from August 2022 through July 2023 as it sought to tamp down the post-Covid-19 surge in inflation. Fuel prices rose by an annual 8.78pc in November after a 7.22pc gain in October. Motor fuel costs fell by 0.15pc in November compared with a 0.17pc drop in October — thanks to lower ethanol and gasoline prices. Diesel prices contracted by 2.25pc in the 12-month period. Power costs slowed to an annual 3.46pc in November following a 11.58pc gain in October. Electricity prices contracted by a monthly 6.27pc after a decrease in power tariffs on 1 November. Monthly inflation slowed to 0.39pc in November from 0.56pc in October. The central bank's inflation goal for 2024 is 3pc, with a margin of 1.5pc above or below. By Maria Frazatto and Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Meta sites largest data center in Louisiana


24/12/10
24/12/10

Meta sites largest data center in Louisiana

New York, 10 December (Argus) — Facebook-parent Meta will build its largest data center ever in northeast Louisiana, near one of the largest US natural gas fields. Meta plans to invest more than $10bn in the Richland Parish data center, which will "play a vital role" in advancing Meta's ambitions in artificial intelligence software, the company said. Construction of the facility is expected to continue through 2030, Meta said. Richland Parish is "an outstanding location" for Meta to build a data center because of its "access to infrastructure", "reliable grid" and "business-friendly climate", the company said. Meta's siting decision also was driven in part by "the availability of reliable, low-cost energy", according to Grow NELA, the economic development agency of northeast Louisiana. The parish is close to the prolific Haynesville shale of east Texas and northern Louisiana, which last year accounted for about 14pc of US dry gas production, according to US Energy Information Administration data. Securing gas supplies in a major gas-producing state like Louisiana may be easier because of the simpler regulatory process behind the construction of intrastate gas pipelines. Gas pipeline construction across US state lines requires the involvement of federal energy regulators, resulting in longer and more uncertain construction timelines. Meta said it will partner with US gas and power utility Entergy to add "enough clean and renewable energy to the grid to cover 100pc of the electricity use" of the Richland Parish data center, with Entergy adding "clean, efficient power plants to its system" to meet power demand. Meta and Entergy have looked at "options to invest in multiple clean energy options, including nuclear energy," Meta said in a statement to Argus . But it did not respond to an inquiry asking if it had secured supply deals for the facility with electricity generated by any particular fuel source, such as nuclear, gas or coal. Amazon, Google and Microsoft in recent months have said they expect to fuel their own planned data centers with nuclear energy , which could provide baseload, low-emission electricity to the new facilities. But long timelines and large upfront costs for conventional nuclear power plants, alongside the uncertain emergent technology behind nuclear small modular reactors, or SMRs, present obstacles to nuclear-powered data center development. For those reasons, the surge in expected US electricity demand through the end of the decade to fuel new planned data centers could, in the short term, translate largely into increased gas demand, Alan Armstrong, chief executive of Williams, the largest US gas pipeline company, told Argus earlier this month. Data center operators "are in such a hurry, they are just wanting the power", Armstrong said. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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