The World's Largest Natural Gas-Powered Ships Are Almost Ready to Sail

Getting a fully-laden cargo ship across an entire ocean requires enormous amounts of energy—usually derived from pollutant-rich diesel fuel. But one environmentally-minded shipping company has bucked that convention and instead begun construction on a pair of hybrid containerships—the first of their kind—that run primarily on cleaner burning liquefied natural gas.

The 3,100 TEU Marlin-class containerships are currently under construction at the General Dynamics' NASSCO shipyard in San Diego for TOTE Shipholdings. These $350 million vessels will measure 764 feet in length when completed late next year, making them the largest ships primarily powered by LNG ever produced. They're not the only LNG-powered ships on the sea mind you, more than 40 LNG-powered vessels are already operating around the world but the Marlins will be the first to use the fuel for hauling cargo.

Each Marlin-class ship will utilize a 8L70ME-GI gas-injected, dual-fuel, low-speed diesel engine capable of running on either conventional fuel oil or LNG. When burning natural gas (stored in the 380 ton cryogenic tanks shown below), the ships are expected to produce 98 percent less sulfur oxides, 71 percent fewer nitric oxides, 71 percent less carbon dioxide, and a jaw-dropping 99 percent reduction in particulate emissions, all while increasing the vessels' fuel efficiency compared to conventional diesel engines. What's more, these ships will carry 60 percent more cargo per trip than TOTE's current class of Sea Star ships and also include a ballast water treatment system to prevent the introduction of invasive species.

Once completed, the ships will operate out of Jacksonville, Florida, transporting goods to and from San Juan, Puerto Rico. If these Marlins prove successful, TOTEs has the option to build three more in the coming years. Hopefully, the rest of the maritime shipping industry will follow suit.

Source: gizmodo.com/

India approves pricing parity between CBM and natural gas

The Indian government has agreed to a proposal for coal bed methane (CBM) operators to price their production on par with domestic natural gas, an official in Ministry of Petroleum and Natural Gas said.

However, the pricing parity would only be effective after the government revised natural gas pricing, which has been hanging fire in the last year, the official said.

The price parity approval would be effective in the case of three CBM operators, Great Eastern Energy, Essar Oil and ONGC Limited. The approval in the case of Reliance Industries Limited (RIL) has been withheld with the government seeking additional information from the company.

Great Eastern Energy operated the Raniganj South block, Essar Oil the Raniganj East block and ONGC, Jharia block, all in eastern India.

The operators would have to price CBM on par with domestic natural gas only after the government was able to finalize revision of gas prices, the official said.

While the final price of natural gas was yet to be decided by the government, it was likely that an uniform gas price, irrespective of source, would force CBM operators to lower their prices since most of them were charging a rate higher than current natural gas price of $4.2 per million British thermal unit (mBtu).

CBM operators’ prices ranged between $8/ to $22/mBtu and would have to lower it considering that it was unlikely that the present government would agree to doubling of natural gas price to $8.4/mBtu.

The previous Indian government had announced doubling of natural gas prices from current rate of  $4.2/mBtu effective from April 2014.

This was, however, kept in abeyance by the Election Commission of India in view of the national elections and at the same time, the sharp hike in natural gas prices has been entangled in political and legal challenges.

The new Indian government, on assuming charge in May, opposed the gas hike proposals of the previous dispensation and set up a new panel to frame a gas pricing mechanism within August 31. The ministry has set a deadline of October 01, to complete fresh consultations with various stakeholders and announce a higher gas price.

This in effect scrapped the recommendations made by two previous panel based on which the previous government had finalized doubling of gas prices.

In a related development, the Petroleum and Natural Gas Ministry has identified ten CBM blocks to be put up for auction for bidding by private operators. Six of the blocks were in western Indian province of Gujarat, two in Madhya Pradesh in central region and the rest in Maharashtra.

As on date, 33 CBM blocks had been awarded for exploration through competitive bidding of which eight have been declared under development with total established reserves of 9.9-trillion cubic feet.

According to ministry data, coal bed methane production in the country during April-June 2014 was estimated at 0.58-million standard cubic meters per day and forecast to increase to four-million standard cubic meters a day by 2017.

Source: miningweekly.com

Fifth India-US Energy Summit to focus on renewable energy

Renewable energy and energy security would be the focus of the two-day annual India-US Energy Summit to be held in Washington next month.

Noting that energy security is critical for both the US and India, Dr R K Pachauri, president of The Energy and Resources Institute, North America (TERI), said the two countries must work together, both in energy security as well as on policy fronts, so as to bring in some positive changes.
The two-day event from September 30, being organised by TERI and Yale University, is likely to be attended by top officials and energy experts from both the countries.

Prime Minister Narendra Modi, who is expected to be in the city to meet President Barack Obama, has been invited to address the meeting in energy, a subject close to his heart.
According to a TERI statement, the focus of the Summit will be on bilateral cooperation in the energy sector and related areas.

"Energy security is critical for both the US and India," Pachauri said.
"The recent geo-political developments in the region from where we import the bulk of our oil, can lead to a drastic increase in oil prices. The devaluation of the rupee has added to the crisis. But I am confident that we are on the cusp of change in the use of our renewable energy resources," he said.
"We should be investing more on renewable energy sources in the coming years. India and the US must work together, both in energy security as well as on policy fronts, so that we can bring in some positive changes," Pachauri said.

Hosted annually since 2009 by TERI North America and Yale University, the fifth US-India Energy Partnership Summit will broadly look at 'Accelerating Resilient Growth and Development', while addressing various issues related to energy efficiency, security, access and technology.
Stakeholders from various sectors will discuss new collaborations in clean technologies and renewable energy, green buildings and sustainable cities, decentralized energy access, alternatives such as shale gas, etc.
Climate change will also form a key component of the discussions, with the proceedings at the General Assembly and Climate Summit providing significant inputs to the Summit deliberations, the statement said.

Source: BT

Open acreage licensing policy regime to take time

India will have to wait for at least two more years to unveil the open acreage licensing policy (OALP) regime to explore hydrocarbons. This is because the pre-requisite for launching the open acreage model — the national data repository (NDR) — will take two more years to be functional.

The contract to set up the NDR has been bagged by HLS Asia (HLSA), which has foreign collaboration with US-based Halliburton Energy Services. The company was awarded the contract in March this year. It will take a year to set up infrastructure and another year to feed data into the system, said officials at DGH.

To make India a favourable destination globally for exploration and natural gas, the government plans to move to the OALP regime soon. This will enable upstream companies to bid for any oil and gas block without waiting for the announcement of bidding under the new exploration licensing policy (NELP) regime. The idea was floated many years ago when Murli Deora was petroleum minister.

The NDR would be hosted at the DGH office in Noida. The government had amended Rule 19 of the petroleum and natural gas rules to enable DGH to obtain all the data from various operators or licensees, which could be disclosed to prospective bidders as and when required under the open acreage system.

Open acreage will enable bidders to bid for blocks on offer at any time of the year. 

Data for the blocks will be made available to bidders through NDR. Pakistan also has such a system in place. The NDR is expected to play a much larger and significant role in the exploration and production scenario in the years to come. The NDR will also facilitate gathering of all geo-scientific data available in India under one roof so that it is easily available to the agencies that require it.

Source: FE

India eyes $40-bn pipeline from Russia to import gas

In a move aimed at ensuring India’s energy security, the Narendra Modi-led government plans to import huge volumes of natural gas from Russia. The Centre is working out the contours of a $40-billion (Rs 2.4 lakh-crore) mega onland pipeline project carrying gas from Russia to India, in one of India’s biggest energy projects till date.

Top government officials told HT that the move follows Prime Minister Narendra Modi’s recent meeting with Russian President Vladimir Putin in Brazil on the sidelines of the Brics summit.

The Prime Minister’s Office (PMO) along with the ministry of petroleum and natural gas are preparing a blueprint to examine the feasibility of this new project, they added.

An announcement on this initiative is expected to be made in December when the two leaders meet at the India-Russia annual summit to be held in New Delhi.

China has already finalised a similar gas pipeline deal with Moscow for importing gas. New Delhi, sources said, also plans to import crude oil from Moscow and the logistics for the same are being worked out.

“Russia so far has directed majority of its oil and gas supplies to the West… however, the scenario may be quiet different in the coming years especially in the wake of its gas pipeline to China and the one now proposed till India,” a senior oil ministry official said.

Two routes are being considered for the gas pipeline project. One is from Russia’s southern border to India via the Himalayas and the second from Russia - Astrakhan - Khazakstan — Uzbekistan and then along the Turkmenistan-Afghanistan-Pakistan route to India (TAPI gas pipeline).

The proposed project from Russia to India is almost four times the cost of  the $10-billion (or Rs. 60,000-crore) Iran-Pakistan-India (IPI) gas pipeline project, also called the peace pipeline, which has failed to take off due to security concerns over the pipeline traversing through Pakistan and has been on the drawing board for the past many years.

“This government (under Modi) is taking all steps that will lead to a reduction in India’s oil import bill... apart from this proposed pipeline, reviving and pushing the other two projects — IPI and TAPI are also being looked into at the highest level,” he added.

The cost of the other onland gas pipeline project from Turkmenistan to India via Afghanistan and Pakistan (or the TAPI) project is also close to $8-10 billion.
GAIL India Ltd will be associated with this project along with a consortium of other state-owned oil and gas companies including Oil and Natural Gas Corp (ONGC), Oil India Ltd and Indian Oil, the official said.

Source: HT

Gas price review likely to cover uniform pricing

In its review of gas pricing guidelines based on the Rangarajan formula, the government is likely to also examine the issue of a proposed uniform price.

Since there are various regimes applicable to gas pricing in the country, a committee under C Rangarajan, then chairman of the Prime Minister's Economic Advisory Council, had favoured a uniform price. It had argued that the basic difficulty in valuation for determining the government's share was that there was no single gas price.

The panel he chaired had proposed a formula that would have doubled the price of domestic gas to a single rate of $8.4 for every million British thermal units (mBtu), to apply equally to all sectors regardless of their prioritisation for supply under the Gas Utilisation Policy.

The new government had decided to put the implementation of this recommendation on hold till September 30, pending a more detailed examination. However, petroleum minister Dharmendra Pradhan has denied any move to set up another committee for reviewing the Rangarajan guidelines. "These are mere speculations," he'd told Business Standard.

India's domestic natural gas production is divided in three broad categories: APM (administered price mechanism) and non-APM gas from nominated fields of national oil Companies; pre-Nelp (New Exploration Licensing Policy) gas; and Nelp gas. These different categories are being allocated under diverse gas utilisation policies and at different prices.

India consumed 121 million standard cubic metres a day (mscmd) of natural gas in 2013-14. That comprised 48 mscmd of APM gas (at $4.2 a mBtu), 7.5 mscmd of non-APM gas from nomination fields (at $4.2-5.2 an mBtu), 13.5 mscmd of Nelp gas (at $4.2 an mBtu), 10 mscmd of pre-Nelp gas (at $3.5-5.7 an mBtu), 41 mscmd of R-LNG (regasified liquefied natural gas, at $12.9-17.4 an mBtu) and 0.3 mscmd of CBM (coal bed methane) gas (at $5.1-6.7 an mBtu).

Some experts say it might be feasible but not sensible to have a uniform gas price. "Gas prices have to be attractive enough for supporting long-term exploration activities. Also, the cost of production varies widely between on-shore and off-shore areas," R S Sharma, former Oil & Natural Gas Corporation chairman, told Business Standard.

He said another argument against the move is that there is demand for gas priced at a high rate of $15 an mBtu. "Even city gas distribution is viable at this price. Buyers are willing to pay. So, why not have differential pricing?" he asked.

However, many experts also do share Rangarajan's views on the benefits of uniform pricing. "Any non-uniform pricing becomes discretionary, both in deciding the prices and allocation of the output," said Debasish Mishra, senior director at consultancy firm Deloitte. "Rather than debating whether gas pricing should be uniform or non-uniform, we should debate how soon we should move to market-determined pricing." Only the latter, he said, would be able to attract fresh investment in domestic exploration and production.

The earlier government had on January 10 notified a new domestic gas pricing regime based on Rangarajan's formula. However, general elections were announced before the new price could be formally announced. The Election Commission asked it to leave the decision to the new government and revision of rates was put off to July 1. The new government decided on June 25 to defer a decision until October, pending wider consultation.

Reliance Industries (RIL), operator of the eastern off-shore KG-D6 block, and its partners, BP of the UK and Niko Resources of Canada, had on May 9 served a pre-arbitration notice on the government, alleging the failure to implement the earlier decision on a gas price rise effective April 1 was preventing the sanctioning of investments of around $4 billion.

This was followed by a formal Notice of Arbitration, served on June 17 by RIL-BP-Niko, naming London-based David Steel as their arbitrator. A month later, on July 17, the government appointed former Supreme Court judge G S Singhvi as arbitrator on its behalf, formally joining the process.

Source: BS

Natural gas is best energy alternative

A conviction that has guided President Barack Obama's energy policy since he took office is that solar and wind power, rather than natural gas, is the way to reduce U.S. greenhouse emissions.

It's a way of thinking that reflects his close bond with the environmental community, which shares his preference for investing in renewable energy sources and conservation in the battle against global warming.

In a United Nations accord in 2009, Obama pledged that the United States would cut its greenhouse emissions 83 percent from 2005 levels by 2050. To achieve that difficult goal, the administration endorsed tax credits for wind energy, and a big increase in research and development funding for a spectrum of renewable sources, especially solar energy. Concurrently, 30 states, including New Hampshire, adopted renewable electricity standards requiring investor-owned utilities to produce a share of their power from renewable sources according to a set timetable, typically by 2020. But renewable sources have fallen short of expectations, outpaced by plentiful and cheap natural gas.

A case in point: Just a half decade ago, during the turmoil of 2008, it was widely assumed that a permanent era of energy shortage was at hand. But due to innovative drilling in the Marcellus, Utica and other shale formations, unconventional gas production has jumped from 2 percent of domestic gas production a decade ago to 37 percent of supply today. This is a game-changer that's led not only to environmental gains, but also the creation of 1.7 million jobs across the United States, including in states with no shale gas production such as those in New England and New York state.

Thanks to the shale revolution, the United States has an abundance of natural gas that is replacing coal in electricity production. Whereas solar and wind power combined currently account for less than 5 percent of the nation's electricity, natural gas accounts for more than 30 percent of America's power supply (and 36.5 percent in New Hampshire) — and its growing use is credited with playing the most significant part in a 13 percent drop in U.S. carbon emissions since 2007.

What's most notable about this success is that the decline in carbon emissions is likely to continue as power production shifts to greater use of natural gas, which has roughly half the carbon content of coal. To be sure, coal and nuclear power will remain part of the energy mix in New Hampshire and nationally, though at a reduced level compared to natural gas.

The fact that the United States has an abundance of natural gas is due largely to the use of an innovative technology that combines hydraulic fracturing, or "fracking," with horizontal drilling in shale production. Estimates of recoverable natural gas reserves have more than doubled since 2005, and this has already had a major impact on electricity production, making the fuel more attractive to utilities.

Although solar and wind are emission-free, adding a new combined-cycle gas plant to the electric grid is less costly and more reliable. Today, scores of natural gas plants are being used, along with nuclear power and coal, to provide "base-load" electricity 24/7, whereas solar and wind energy are only available when the sun is shining and the wind is blowing. According to the Energy Information Administration, wind energy has a capacity factor of 32.3 percent and solar energy is even less, at 27 percent. In the years ahead, demand for electricity will grow as our economy becomes increasingly digitalized and improvements to our nation's infrastructure begin. So over-reliance on undependable solar and wind power would be problematic at the very least. Without greater reliability and new technology for large-scale electricity storage, the contribution to our power supply from renewable sources will continue to be relatively small.

Natural gas plants on average operate well over 50 percent of the time, and some at much higher capacity factors. We need to recognize the value of natural gas as a cornerstone of environmental policy, especially its benefit in reducing greenhouse emissions. However, if we fail to make use of what actually works in the real world rather than base energy policy on incorrect assumptions about renewable sources, we will wind up squandering government funds on the wrong energy approach.

Source: seacoastonline.com