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Oil & Gas

Indonesia’s Pertamina to buy domestic crude oil from contractors from January

4 January 2019

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Indonesia

JAKARTA: Indonesian state energy company PT Pertamina has signed deals to purchase crude oil produced from domestic fields by Chevron Corp, PetroChina and others, a company source familiar with the matter said.

Purchases will start this month, including from other contractors such as Petrogas and Saka Energi Indonesia, the person said on Friday, without disclosing the volume agreed. The person declined to be identified because of the private nature of the transactions.

The deals follow a government regulation introduced last September requiring contractors to offer their production to Pertamina, and obliging the state company to prioritise crude purchase from Indonesian fields. Jakarta is seeking to slash its energy import bill as it grapples with a decline in the Indonesia’s currency, the rupiah.

The biggest oil-producing nation in Southeast Asia currently supplies around 775,000 barrels per day (bpd) of crude oil, of which 550,000 bpd already goes to Pertamina, including its own oil output.

A Pertamina spokesperson was not immediately available for comment.

Chevron Pacific Indonesia, a local unit of Chevron, “has reached agreement with Pertamina for the sale of crude oil,” spokesman Cam Van Ast told Reuters without disclosing further details.

Indonesia’s deputy energy minister Arcandra Tahar has previously said oil contractors export around 217,000 barrel per day (bpd) of their share of the country’s output which could potentially be diverted to Pertamina.

Oil & Gas

Energy World Philippines gets go signal to build LNG facility

4 January 2019

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Philippines

THE local unit of Australia’s Energy World Corp. Ltd. (EWC) has taken the lead in the race to build an integrated liquefied natural gas (LNG) facility in the Philippines as its proposal has been cleared by the Department of Energy (DoE).

In a letter dated Jan. 2 to the Australian Securities Exchange, EWC said DoE Secretary Alfonso G. Cusi on behalf of the department had issued Energy World Gas Operations Philippines, Inc. a permit to construct, own and operate an LNG import terminal and regasification facility on Pagbilao Grande island in Quezon province.

“The permit which was issued on 21 December 2018 forms an update to the original permit documentation and provides for a further construction period of 24 months from the permit issue date,” it said.

EWC said the permit would enable the completion date for the first tank of the LNG hub to be aligned to the commercial operation date of the associated 650-megawatt (MW) power plant and the National Grid Corporation of the Philippines switchyard expansion, which is under construction, and for the construction of the second tank.

Separately, Rino E. Abad, director of the DoE’s Oil Industry Management Bureau, told reporters on Thursday that EWC is now leading as far as permitting is concerned.

Mr. Abad said EWC’s proposal was the first to be endorsed by the centralized review and evaluation committee (CREC) for Mr. Cusi’s approval. He said the proposal was simply an extension of EWC’s previously approved project that had encountered delays because of funding issues.

The proposal of Phoenix Petroleum Philippines, Inc. and its Chinese partner China National Offshore Oil Corp. (CNOOC) is currently being evaluated by CREC, he said.

First Gen Corp. and its partner Tokyo Gas Co., Ltd. were the last to submit its project proposal, which is now under evaluation by Mr. Abad’s group for compliance with financial, technical and legal requirements.

Mr. Abad said the issue with EWC’s previous application was mainly on the extension of the project’s previously issued permit.

“The problem is nag-submit siya ng work program pero hindi niya ma-explain ‘yung budget (The problem was it submitted a work program but it was not able to explain its budget.),” he said.

Mr. Abad said the TWG (technical working group) had asked EWC to substantiate its application since at that time, the unfinished project needed around P6 billion to be completed. He said the company had replied with supporting documents, including approval from shareholders that they would release a special fund for the project’s completion.

“Ang sa amin naman as long as hindi masyadong vague ‘yung plano ‘yan naman ay ine-encourage natin, sinusuportahan ‘yung investors (From our end, as long as the plan is not too vague, we encourage it and support the investors.),” Mr. Abad said.

He also said that EWC also explained that the release of funds by local lenders depends on the approval by the DoE of the extension permit.

In an earlier interview, EWC Director Graham S. Elliott said the company had resumed talks with local lenders to fund the completion of its 650-MW combined cycle gas-fired power plant.

“We are in the process of finalizing the project funding from the Development Bank of the Philippines and Land Bank [of the Philippines] and other institutions, and hopefully we’re about six to eight months away from commercial operation of the first 200-MW gas turbine,” Mr. Elliott had said.

Francis Nicolas M. Chua, DBP first vice-president and head of the bank’s corporate finance group, confirmed the revival of talks with EWC.

Renewables

First Gen Corp./ EDC renew power contract for General Milling in the Philippines

4 January 2019

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Philippines

First Gen Corp. has renewed a contract with food firm General Milling Corp. (GMC) related to the supply of electricity sourced from renewable energy.

First Gen said that under the new contract, the Lopez-led firm would provide GMC’s factory in Lapu-Lapu City with electricity coming from Energy Development Corp. (EDC), First Gen’s renewable energy arm.

EDC has an installed power generating capacity of 1,471.8 megawatts, from geothermal, wind, hydro and solar energy platforms.

The previous contract from 2016 explicitly stated the supply of 6.5 MW of power to come from an EDC geothermal plant on Negros Island, so we assume the same applies to the new contract.

The factory in Lapu-Lapu is the largest in the portfolio of GMC, which has been manufacturing flour and bakery products for more than 50 years.

GMC has since expanded to the manufacture of animal feeds, corn mill, snack food, pasta, instant noodles, edible oil and coffee.

“We chose to renew with First Gen and EDC because aside from the pure renewable energy that they provide, we are very satisfied with their service. It is just like a renewal of vows for us,” GMC executive vice president Joselito Parco said in a statement.

Last December, EDC signed a two-year contract with its latest customer being Citizen Machinery Philippines Inc. (CMP), maker of lathe machines with facilities in Tanauan, Batangas. CMP is a subsidiary of Japanese timepiece maker Citizen Watch. The contract involves the supply of 2.5 MW of geothermal power.

Others

Hanoi heading to transform into a smart city

4 January 2019

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Vietnam

Criteria for building a green and smart urban area for Hanoi include smart economy (competitive economy), smart mobilization (convenient transportation system – good technical infrastructure), smart residents (city with abundant and high-qualified human resources), smart environment (good living environment, natural resources reasonably used and preserved), smart urban management (e-government), good quality of life (all needs are met appropriately and conveniently), Thai listed.

Hanoi is developing five satellite urban areas that are components of its master plan with synchronous and modern infrastructure and will be a leverage for newly-developed urban areas to solve the problems of population growth and overload of infrastructure.

Satellite cities are arranged in key areas connected to the main center, including Lang – Hoa Lac, Son Tay, Xuan Mai, Phu Xuyen – Phu Minh and Soc Son.

Besides, the plan embraces three ecological cities which are Phuc Tho, Quoc Oai, Chuc Son with the main functions of ecological cities – agriculture – training – traditional villages, and 10 towns with the main function of administrative centers, supporting production and providing public utilities for rural areas and green corridors. These are areas for Hanoi’s construction and development to become a green city.

Smart residents

Thai stressed that Hanoi has implemented and approved 57/68 projects, fulfilling 83% of the approved projects.

The urban development spaces are defined, the green spaces are shaped, the functional areas and specific functional areas are established to facilitate the mobilization of all socio-economic resources, domestic and foreign economic ones for investment and construction.

The completed projects help to change the urban landscape, provide utilities, and improve life quality of Hanoi’s residents.

Besides, the spaces contribute to the economic development of the capital in particular and the country in general, Thai said.

In addition to Hanoi authorities’ efforts, in order to realize the goal of building Hanoi as a green and smart city, the participation of all strata of the people both at home and abroad is particularly important.

Because every development plan is aimed at the highest purpose of taking people as the center for service, developing green and smart city, and bringing the best utilities to the people, Thai noted.

He emphasized that a smart city must also meet the criteria of “smart residents”. Therefore, in the time ahead, in parallel with the process of deploying technology applications in the capital’s management and construction planning, the city will universalize programs of education, training, communication to all levels so that they can really understand, use and agree to join hands with the authorities, managers and policy makers to build Hanoi as a green and smart city in the near future.

Renewables

Solar plants’ consumption crisis

3 January 2019

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Vietnam

The National Load Dispatch Centre under the Electricity of Viet Nam (EVN) has just announced it is considering reducing the volume of electricity transmitted from all solar plants into the national grid to deal with overloaded transmission lines.

The move would force all solar power plants to reduce their production below capacity, causing significant damage to investors, said Nguyen Duc Cuong, director of the centre.

The transmission line overloads are due to the rush with which investors moved to back solar projects, precluding synchronous planning and suitable renewable energy development policies, Cuong said.

Electric transmission systems in Ninh Thuan and Binh Thuan are overloaded because they were not designed to handle the large number of solar plants located in the two central provinces, he said.

The central region is not one of the biggest electricity consumers in the country. The power sources must be connected to 220 KV and 500 KV grids to transmit electricity to far-away places.

According to the amended National Power Development Master Plan VII (for 2011-30) that was approved in 2016, the country’s power production from all resources will reach a total capacity of 60,000 MW in 2020, 96,500 MW in 2025 and 129,500 MW in 2030, with an average growth rate of 6,000-7,000 MW per year. However, the proposed solar power capacity is just 850 MW in 2020, about 4,000 MW in 2025 and about 12,000 MW in 2030, reported Nguoi Lao Dong (Worker) newspaper.

At present, Viet Nam has 332 power plants in operation and under construction with a total estimated capacity of 26,900 MW. The country’s solar plants are mainly located in Binh Thuan and Ninh Thuan provinces in central Viet Nam, Cuong said.

According to the centre, purchase negotiations are ongoing for 749.63 MW of solar power from plants in Binh Thuan and 1,732.82 MW from plants in Ninh Thuan.

The market has seen a wave of investment into solar power plants since the decision to set the purchase price of solar power at 9.35 US cents/KWh from April 2017.

Tran Viet Ngai, chairman of the Viet Nam Energy Association, said that because the country has already exploited nearly all of its hydropower resources, the development of renewable energy sources such and wind and solar power is essential.

While solar energy is widely available, Ngai said work must be done to use it effectively. Without well-planned investment schemes and operating mechanisms, solar power will merely destabilise the electrical system and could lead to grid collapses.

Solar power plants only work when the sun is shining and storage batteries are functioning properly. For large-scale projects, the system works for three to five hours; however, Ngai cautioned that advanced storage systems are very expensive.

Meanwhile, adding thousands of MW from solar power plants to the national grid requires suitable load dispatch plans in case the solar plants stop generating energy.

This is a complicated process because solar power plants, localities and the electricity sector must work together to build the dispatch plans, Ngai said.

The rapid development of solar and wind power plants has reduced the country’s reliance on power from resources that cause pollution.

However, Ngai said developing too many solar projects at the same time in certain places could lead to higher strain on the electrical grid, necessitating the construction of more transmission grids and transformer stations. Of course, these investment costs will be calculated into electricity prices.

Nguyen Duc Cuong said investment could not be executed too quickly because it takes a lot of time to plan projects, arrange investment capital and get investment licences.

To accelerate the construction of transmission lines, Minister of Industry and Trade Tran Tuan Anh has asked the Government to allow the use of capital from private investors to develop some transmission stations and grids for solar and wind power plants. After construction, the investors will hand the facilities over to the electricity industry to manage and operate them. –– VNS

Oil & Gas

Energy recommends lifting of ban on West Philippine Sea exploration

3 January 2019

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Philippines

The Energy Department officially recommended to the Department of Foreign Affairs the lifting of the moratorium on oil and gas exploration in the West Philippine Sea amid the enhanced relations between China and the Philippines, officials said.

Energy Resource Development Bureau director Ismael Ocampo said the recommendation was submitted to the DFA, on the request of PXP Energy Corp. through Forum Energy Ltd. to lift the force majeure imposed on Service Contract 72 or the Recto Bank.

“Our main concern is energy security,” Energy Undersecretary Felix William Fuentebella said, adding the move was in line with the government’s thrust to explore for more indigenous sources of energy.

Fuentebella said the Philippines was left behind by its Southeast Asian neighbors in the area of oil and gas drilling.

PXP sent the letter of request to the DoE last month requesting the lifting of the force majeure in the wake of the signing of the memorandum of understanding between the governments of the Philippines and China for the cooperation over the West Philippine Sea.

“We see the lifting of the force majeure as a positive development for our SC 72 block and for the country in general,” Forum Energy country representative Daniel Stephen Carlos said earlier.

Forum Energy, where PXP holds a direct and indirect interest of 78.98 percent, has a 70-percent participating interest in SC 72 located in Northwest Palawan, through wholly-owned subsidiary Forum GSEC. PXP has a total economic interest of 53.1 percent in SC 72.

PXP is an upstream oil and gas company incorporated in the Philippines whose shares are listed on the Philippine Stock Exchange. The company, directly and indirectly, owns oil and gas exploration and production assets in the Philippines, and indirectly owns an exploration asset located in offshore Peru.

Energy Secretary Alfonso Cusi earlier advised PXP Energy to apply for the lifting of the moratorium on its service contracts amid the recent breakthrough in negotiation between the Philippines and China.

Cusi also expressed keen interest to immediately meet with his Chinese counterpart to draw up the framework of the oil and gas cooperation over West Philippine Sea or South China Sea.

“I have already expressed my intention to meet, my Chinese counterpart. I have sent my message already that I want to meet immediately,” Cusi said.

The Philippines and China agreed to cooperate on oil and gas development, as a part of the deals forged during the visit of Chinese President Xi Jinping in November.

“The MOU is to explore a solution. I don’t want more delays, so I gave notice to meet already,” Cusi said,

He said the notice was directed to China but coursed through the Department of Foreign Affairs.

“To China through DFA, I am ready. I want to meet immediately, anytime, anywhere. I am not passive, I’m saying let’s meet already,” Cusi said.

Energy assistant secretary Gerardo Erquiza said DoE advised DFA as a “matter of protocol.”

“Anytime we can start and go through the process, we just have to go through some details,” Erquiza said.

He assured that the framework would work within the service contract system of the Philippines and “sets forth the elements of the Philippine jurisdiction.”

Bioenergy

Chinese Waste to Energy Firm to Develop MBT Plant in Singapore

3 January 2019

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Singapore

Waste to energy operator, China Jinjiang Environment Holding Company Limited, has obtained shareholders’ approval for, and is pushing ahead with, an Engineering Procurement and Construction (EPC) agreement to construct a pilot, “first-of-its-kind” Mechanical Biological Waste treatment project in Singapore.

The MBT project, which has a waste treatment capacity of 500 tonnes per day, was initiated by the National Environmental Agency (NEA) of Singapore as part of its efforts to maximise recycling and resource recovery from municipal solid waste, maximise land-use and prolong the lifespan of Singapore’s only landfill, maximise resource extraction for energy generation and harness MBT’s potential as an alternative technology to treat municipal solid waste.

According to the company, when completed, the project, located in Tuas Avenue 2, will be among only five in Asia.
Following a competitive tender initiated in November 2015, NEA awarded the tender with a 20-year concession period to a consortium comprising Hangzhou Jinjiang Group Co., Ltd. (Jinjiang Group), which is a controlling shareholder of the Company, and Eastern Green Power Pte Ltd (EGP) in December 2016.

While Jinjiang Group had intended for the newly-listed Group to undertake the MBT project instead, this was not possible due to strict project rules which did not allow the transfer of the tender from the consortium to another entity. Accordingly, Jinjiang Group and EGP jointly established JE Synergy Pte Ltd (JE Synergy) to own and operate the MBT project.

Jinjiang Environment said that it has built up a track record of undertaking design, engineering and construction projects in China, Brazil and India, which are similar in nature to the MBT Project.

Jinjiang Group intends said that it intends to participate in the MBT project and to tap into Jinjiang Environment’s experience and expertise in such projects. Accordingly, JE Synergy will engage JE Synergy Engineering Pte Ltd (“JE Synergy Engineering”), an associated company of Jinjiang Environment, to provide EPC related services to the MBT project for a contract sum of S$66,563,000 (US$48,717,792)

As the EPC agreement constitutes an interested person transaction, Jinjiang Environment had sought and obtained the approval of its shareholders for the EPC agreement at an extraordinary general meeting held today. Following the completion of construction of the MBT project, the Group may provide operations and maintenance services to the MBT project on an ongoing basis.

Renewables

Cache Logistics contracts Sembcorp for 7.9MW of rooftop solar projects in Singapore

3 January 2019

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Singapore

Cache Logistics Trust has contracted Sembcorp Industries to install and operate rooftop solar systems at three logistics warehouses in Singapore owned by Cache.

The 7.9MW of PV capacity will be installed on warehouses including the Commodity Hub, Pandan Logistics Hub and Cache Changi Districentre.

When completed, Commodity Hub will house Singapore’s largest rooftop solar facility to date, standing at roughly 6.2MW capacity.

When fully installed in mid-2019, the system is expected to produce over 9,400MWh of power annually, or enough renewable energy to power more than 2,000 four-room HDB flats in a single year. Any surplus solar power generated will be exported back to the grid.

Koh Chiap Khiong, head of Singapore, Southeast Asia & China (Energy), Sembcorp, said: “Sembcorp is committed to sustainability. Our aim is to do good and do well, providing energy that makes a difference to our customers, community and the planet. We are honoured that companies trust us as one of Singapore’s largest solar power players, and are pleased to partner with Cache and welcome them as our new solar power customer. This new project will not only grow Sembcorp’s solar portfolio in Singapore with the installation of over 20,000 solar panels, but also help Cache reduce its carbon footprint. It will also generate renewable energy for the grid and avoid over four million kilogrammes of carbon dioxide, supporting Singapore’s environmental goals and helping to meet the nation’s target of 350 megawatts peak solar power capacity by 2020.”

Daniel Cerf, CEO of ARA Trust Management (Cache) Limited, the manager of Cache Logistics Trust, said: “We are pleased to undertake this green project with Sembcorp which brings about the benefits of not only using under-utilized rooftop space in our warehouses to lessen our conventional energy consumption and operating costs but more importantly, to reduce our carbon footprint. We will continue to review other properties within our portfolio to implement similar energy efficient initiatives in the interest of achieving greater environmental sustainability.”

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