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Oil & Gas ,
Renewables

Shell pursuing $1 billion exit from Indonesia LNG project – sources

3 May 2019

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Indonesia

LONDON (Reuters) – Royal Dutch Shell is moving to sell its stake in Indonesia’s $15 billion (£11.5 billion) Abadi liquefied natural gas (LNG) project, industry and banking sources said, following on from an asset disposal programme that has raised more than $30 billion.

Shell, the world’s largest buyer and seller of LNG, is raising cash to help pay for its $54 billion purchase of BG Group in 2015 and hopes to raise around $1 billion from the sale of its 35 percent stake in the project, the sources said.

Shell’s decision to sell out of the Abadi project in the Masela block, operated by Japanese oil and gas firm Inpex Corp which holds the remaining stake, highlights the difficulty Southeast Asia’s largest economy has in attracting energy investment.

Shell, Inpex and an official with Indonesia’s Energy and Mineral Resources all declined to comment.

Construction was due to start in 2018, but in 2016 was delayed until at least 2020 after Indonesian authorities instructed a switch from an offshore to an onshore facility.

Inpex and Shell are now preparing a new Plan of Development for submission this year, Shell’s annual report revealed.

The project is not expected to be operational until at least 2026, but Inpex has started preliminary front end engineering design for an LNG plant with an annual capacity of 9.5 million tonnes.

Dwi Soetjipto, chairman of Indonesian oil and gas task force SKK Migas, said in March that the government and the operators have not agreed on the cost for the project and the government has not approved the revised development plan.

LNG GROWTH

Shell sees LNG as a central pillar of the world’s transition to lower carbon energy in the coming decades. The super-chilled fuel allows easier transportation of natural gas, the least polluting fossil fuel, but is relatively expensive to develop.

The decision to sell out of Abadi comes weeks after the Anglo-Dutch company decided to exit a major Baltics LNG project led by Russian state gas giant Gazprom.

Shell last year gave the green light for the development of a $31 billion LNG export terminal in Western Canada, known as LNG Canada.

Chief Financial Officer Jessica Uhl said on Thursday that overall Shell was happy with its LNG portfolio and was confident of its ability to grow it in line with the market.

Oil & Gas

Oil potentials in Indonesia need more exploration: association

2 May 2019

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Indonesia

akarta (ANTARA) – President of the Indonesian Petroleum Association (IPA) Tumbur Parlindungan expects oil and gas exploration activities in Indonesia to be encouraged given that there are still many oil reserves in the Southeast Asia region.

“Unfortunately, in the past 15 years, exploration activities have been quite minimal in Indonesia. In fact, many other countries whose oil and gas reserves are less than those of Indonesia have been improving for upstream oil and gas investments,” Tumbur Parlindungan said in a press release received here on Sunday.

He stated that at present, Indonesia is having opportunities and challenges in restoring the glory of the upstream oil and gas sector.

This, he continued, can be done by restoring the interest and enthusiasm of global oil and gas investors to carry out exploration and exploitation in the country.

“National oil and gas reserves are proven to be still relatively large in the Southeast Asia region, even in Asia. It’s just that there needs to be additional oil and gas reserves realized by exploration,” said Tumbur.

For this reason, he said, this fact should be of concern to all stakeholders, considering that the portion of oil and gas in national energy needs is still highest when compared to coal, or with new and renewable energy.

Based on the General Plan of National Energy (RUEN), the target of mixed fossil energy in 2025 reaches 47 percent compared to 43.5 percent in 2050. .

Still based on RUEN, national oil production is projected at 567,000 barrels of oil per day (BOPD) in 2025, while in 2050 it is 698,000 barrel oil per day (BOPD).

Meanwhile, the national crude oil refinery needs in 2025 reached 2.19 million BOPD and increased to 4.61 million BOPD in 2050.

Assuming that national oil production is absorbed by 100 percent for domestic needs, national crude oil imports in 2025 will range from 1.67 million BOPD and 3.92 million BOPD by 2050.

Electricity/Power Grid

Asiatic Group subsidiary extends Cambodian energy contract

2 May 2019

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Cambodia

A UNIT of Catalist-listed engineering group Asiatic Group (Holdings) will keep on supplying power to a state-owned Cambodian electricity company, in an extension inked and announced on Thursday.

Indirect subsidiary Colben Energy (Cambodia), which is 85 per cent-owned by Asiatic, has extended a power purchase agreement with Electricite Du Cambodge until Apr 30, 2022.

Under the amended agreement, it also tweaked the minimum amount for purchase, down to 60 per cent of contracted capacity, from 65 per cent before.

Colben Cambodia’s contract to supply power from two 10-megawatt plants in Phnom Penh and Sihanoukville began in June 2005 and was slated to run out on Apr 30, 2019.

The changes to the power purchase agreement should have a positive material effect on the earnings or net tangible assets per share for the year to March 31, 2020, said Asiatic’s board.

Bioenergy

Indonesia 2019 biodiesel exports to rise in best-case scenario -association

2 May 2019

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Indonesia

JAKARTA: The Indonesia Biodiesel Producers Association (APROBI) estimates the country may export up to 2 million kilolitres (kl) of unblended biodiesel in 2019 in an “optimistic scenario”, Vice Chairman Paulus Tjakrawan told reporters on Thursday.

In a “pessimistic scenario”, he said biodiesel exports this year would be around 1 million to 1.2 million kl. This compares with exports of 1.78 million kl of biodiesel last year.

The “pessimistic scenario” takes into consideration the European Union (EU) setting countervailing duties on Indonesian biodiesel this year, Tjakrawan said, after it launched an anti-subsidy investigation on the Indonesian biofuel in late 2018.

Indonesia resumed exports of biodiesel to Europe early last year, after the World Trade Organization (WTO) had ruled in its favour on several challenges Jakarta made on previous anti-dumping duties imposed by the EU on its biodiesel shipments.

In the first quarter this year, Indonesia’s overall biodiesel exports were 173,542 kl, association data showed, up 78 percent from the same period last year. The shipments were mostly headed to the EU and China.

In Indonesia’s domestic market, first-quarter consumption of biodiesel more than doubled to 1.5 million kl from 659,813.51 kl a year earlier, APROBI data showed on Thursday.

Consumption of the palm oil-based fuel jumped after Indonesian government made the use of B20 fuel mandatory. That’s diesel with a 20 percent biodiesel component.

Indonesia estimates 6.2 million kl of domestic biodiesel consumption in 2019.

APROBI Chairman M.P. Tumanggor said the government aims to soon conduct a road test for B30 biodiesel, containing a 30 percent bio component.

“According to schedule, (the test) will go on until September, but we want to speed it up to (finish) in July,” Tumanggor said.

APROBI estimated that B30 implementation would increase domestic consumption of biodiesel to as much as 10 million kl.

According to government regulations, road vehicles will have to start using B30 fuel from 2020, although an energy ministry official has said the implementation schedule will depend on the results of the road test.

Electricity/Power Grid

Electricity Generating Authority of Thailand (EGAT) to renovate power plants

1 May 2019

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Thailand

BANGKOK, 1 May 2019 (NNT) – The Electricity Generating Authority of Thailand (EGAT) is planned to renovate existing power plants for better flexibility

And to support electricity generation from renewable energy, while the peak electricity usage this summer season is expected to increase no more than 500 megawatt.

EGAT’s Governor Viboon Rerksirathai has said on the occasion of EGAT’s 50th anniversary that the EGAT will continue to maintain and develop the country’s energy security in the future in keeping with consumers’ changing demands with more renewable energy introduced to the power grid, and to improve flexibility of power plants to be able to produce more electricity to substitute those provided from renewable energy in case of outage.

The renovations will start at Wang Noi Power Plant costing 160 million baht budget and is expected to complete in 2020.

The renovations are also further planned for Phra Nakhon Nuea and Chana power plants.

EGAT has also developed power storage systems in forms of Pumped Storage Hydro Plant and large scale batteries at Bamnet Narong Electricity Station in Chaiyaphum, and Chaibadan Electricity Station in Lopburi, equipped with power management, usage prediction, and generation control from renewable energy systems.

Thailand’s highest electricity usage this year has so far been recorded on 24 April 2019 at 30,120 megawatt due to hot climate. It is expected the number may increase by 500 megawatt, reaching up to 30,500 megawatt this summer.

Energy Economy

Italy extends funds to help light up Chin state

1 May 2019

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Myanmar

Italy will lend €30 million to Myanmar for solar panels to light up rural residential areas in Chin State, said U Tun Lwin, deputy permanent secretary at the Ministry of Agriculture, Livestock and Irrigation (MOALI).

“We will use the funds to implement electrification projects in Chin state,” he said.

The loan agreement was signed between Italian Ambassador to Myanmar Ms. Alessandra Schiavo and U Khant Zaw, director general of Department of Rural Development in Nay Pyi Taw on April 30.

The department had been carrying out electrification projects in villages not connected to the grid via a US$90 million loan from the World Bank. The Italian funds will be added to this amount.

“We have started implementation under the World Bank’s loan. For the electrification of Chin State, the Italian loan will also be utilised,” he added.

Approved in August 2018, the interest-free loan comes with a grace period of 18 years, with repayments starting in 2037. The repayment period is 10 years.

The funds will supply solar power to around 100,000 households in Chin State.

The government is currently carrying out its National Electrification Plan to electrify the whole country by 2030 using US$400 million in funds from the World Bank in 2016-17. The Ministry of Electricity and Energy will utilise $310million, or around 78pc of the funds, for grid areas while the Department of Rural Development will utilise the remaining $90million for the off-grid areas.

Until 2018, the department had supplied solar systems to more than 200,000 households from 4119 villages and about 350,000 public buildings. It is expected to provide home solar systems to more than 2400 villages and small-scale power systems to 100 villages this year.

Therefore, it can electrify more than 25pc of households in off-grid areas by the end of this fiscal year, said Union Minister U Aung Thu at the signing ceremony.

Energy Economy

French to help finance Myanmar’s hydropower upgrades

1 May 2019

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Myanmar

Myanmar is set to receive a €35.7 million (K60.2 billion) loan from the French Development Agency (AFD) to upgrade to five hydropower plants, President U Win Myint said in a message to the Assembly of the Union (Pyidaungsu Hluttaw).

The term of the loan is for 13 years, with a seven-year grace period, at an interest rate of 0.68 percent, said Deputy Minister of Planning and Finance U Maung Maung Win.

The funds are expected to be used between this year and 2024 for heavy maintenance work and upgrades to the Ye Nwe, Mone Chaung, Zaung Tu, Kinda, and Thaphan Seik hydropower plants. After the upgrades, the plants are expected to be able to run at full capacity, raising power generation from 565 million kilowatt hours to 646 million kilowatt hours.

Due to the lack of heavy maintenance in the past, the plants had experienced some breakdowns Deputy Minister of Electricity and Energy U Tun Naing told the hluttaw.

“The five plants have been operating for between 10 and 30 years. As little heavy maintenance was performed in the past, there have been frequent faults in turbines, generators and control centres. So the need to upgrade the plants is pressing,” U Tun Naing said.

Of the total loan, €5.4million will be allocated to the Ye Nwe plant, €16.4millionto Zaung Tu, €2.4million to Kinda, € 6.5millions to Thaphan Seik, and €3.3million to Mone Chaung. The rest of the funds, some €1.7million will be used to hire a project consultant, he said.

The amount of foreign debt taken on by the Ministry of Electricity and Energy until last December 31, totals US$6202.36 million, with US$3026.79 million still outstanding, said U Maung Maung Win.

Separately, the Yangon Electricity Supply Corporation has requested approval to accept a 1.45 billion baht (K68.7 billion) loan from the Neighbouring Countries Economic Development Cooperation Agency of Thailand.

Bioenergy

Get on board with waste-to-energy plants, Zuraida urges critics

1 May 2019

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Malaysia

PUTRAJAYA: Putrajaya has urged critics of waste-to-energy (WTE) plants to be more receptive to the idea, even as the government moves to clean up the accumulated rubbish in the country.

Housing and Local Government Minister Zuraida Kamaruddin said some non-governmental organisations (NGOs) and other individuals did not have a good perception of the WTE.

WTE is a waste management facility where solid rubbish is burnt to produce electricity.

Noting that in the past, people thought negatively about incinerators, Zuraida said the technology had since advanced and the system was not something to worry about anymore.

“There are samples of WTE being placed, constructed and positioned in the middle of housing estates or cities. There is no issue actually. I hope people can learn to be more open about it.

“For the country to progress, with all the outstanding rubbish we have, I have to clean up that way,” she said in an interview held in conjunction with Pakatan Harapan’s one year in power recently.

Zuraida had previously stated that the usage of dump sites was expensive with land cost as one of the burdening factors, while WTE plants are cleaner, more productive and more economical.

Zuraida had said the transition to WTE would also enable the country to generate revenue through the production of renewable energy.

Earlier this month, the Kuala Lumpur Taknak Insinerator (KTI) movement questioned how Zuraida drew the conclusion that WTE initiatives offered cleaner, more efficient and more economical alternatives to landfills, without listening to public concerns.

It claimed Zuraida’s answer in Parliament that incinerators were less costly compared with landfills bordered on ignorance.

Elaborating on the matter further, Zuraida said the ministry planned to convert landfills into WTE plants.

“We just need to transform that. It is easier. We do not have to go through the DoE (Department of Environment) process. This is because, since it is already approved as a landfill, it can be approved for WTE,” she said.

On which landfills were being considered for WTE plants, Zuraida named Bukit Payung and Seelong (Johor), Jabi and Samling (Kedah) and Bukit Tagar (Selangor).

On accusations by KTI that she was turning a deaf ear over concerns against incinerators, Zuraida said she had engaged with them, and that she had met up with them in Parliament a few times.

“I sat down with them when I became minister. They came to see me first.

“They wanted to do a recycling programme, and I was on board with it. I asked them to come under the ministry’s National Community Policy, to do it with the community,” she said.

The PKR vice-president said while she has spoken on enhancing and increasing activities for recycling, the approach taken by the KTI was “a bit too slow”.

Zuraida said the group could carry out the recycling programme at a high middle income residential area, where people were more educated and willing and had more time to do it.

“But at the moment, I have so much outstanding rubbish, I have to clean up the country first. Let it be clean first, then we move on to recycling.

“We will come to a point of a complete circle economy, where rubbish can be turned into money, and that is where the recycling programme comes in.

“So it is not true I have turned a deaf ear. I do not have a deaf ear,” she said.

Zuraida also said the government was planning to amend the Local Government Act 1976 for heavier penalties to be imposed to curb illegal waste operations.

She said at present local councils could only impose a maximum fine of RM300.

“So, they can fine the culprits RM300 over and over again, it would not matter. This is why I am going to amend the Act 171 (Local Government Act 1976), where a higher fine of RM500,000 can be imposed,” she said.

Zuraida said they were now gathering feedback from other ministries on the amendment, which she admitted was taking too much time.

“Being in the government, there is too much bureaucracy. It is not ready yet. It is now making its rounds at the ministries for their feedback. That is taking time. But I believe it can be done by this year,” she added.

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