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  • Oil & Gas

Malaysia’s Petronas to ramp up LNG bunkering by mid-2019

12 December 2018

 – 

  • Malaysia

Singapore — State-owned Petronas aims to start commercial LNG bunkering operations at several facilities across Malaysia by mid-2019, in a move that reaffirms the company’s efforts to compete in a key growing segment and support Malaysia’s strategic intent of becoming a regional LNG bunkering hub.

Following the company’s first LNG bunkering operation at the Pengerang LNG terminal earlier this year, Petronas aims to start up commercial LNG bunkering by second half of 2019 from Melaka and Terengganu in peninsular Malaysia, and Labuan in Sabah.

“Dual-fueled LNG-based engines are expected to be the future solution,” the company said in its annual activity outlook released Wednesday. “In close collaboration with industry associations, programs are aligned to develop necessary infrastructures to support a swift and effective migration to LNG, as the cleaner option.”

The company’s first LNG bunkering was delivered aboard the Kairos, the world’s largest LNG bunker vessel with a capacity of 7,500 cu m, as the carrier made its way from the Hyundai Mipo Dockyard in Ulsan, South Korea, to Europe, the company said in a statement last month.

Pengerang LNG’s bunkering, reload and small-scale capabilities position the facility, strategically located in the Singapore Strait, as a front runner to meet the changing landscape of the marine fuel market.

“We believe that small-scale LNG opportunities will increase from the utilization of alternative cleaner fuel such as LNG. The new regulation of 0.5% global sulfur cap to be imposed by the International Maritime Organization in January 2020 will make LNG the alternative fuel of choice for the shipping industry,” Petronas LNG chief executive officer Ezhar Yazid Jaafar said in November.

  • Oil & Gas , 
  • Others

Energy World revives talks with lenders for Pagbilao project funding

12 December 2018

 – 

  • Philippines

THE local unit of Australia-listed Energy World Corp. Ltd. (EWC) has revived talks with lenders to finance the completion of its 650 megawatt (MW) combined cycle gas-fired power plant after it has received certification from the government that the project is one of national significance.

“We are in the process of finalizing the project funding from the Development Bank of the Philippines (DBP) 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-megawatt gas turbine,” said EWC Director Graham S. Elliott in an interview.

The funding will be used for the completion of the power station, he added.

“It’s a re-working of the loan agreement that was signed about three years ago — an updated version of the existing loan agreement,” he said.

Mr. Elliott declined to disclose the amount being borrowed from the lenders, but said the project needs additional funding.

“It’s something around $75 million [that] we’re looking for,” he said.

Aside from the power plant being built in Pagbilao, Quezon province, EWC previously disclosed plans to build a liquefied natural gas (LNG) hub in an adjacent area with a capacity of 3 million tons per annum.

The LNG capacity can support gas-fired power plants with a combined capacity of 3,000 MW. It can provide expansion options for both the company and third-party gas customers.

Mr. Elliott said the hub is a strategically important asset for the country’s nascent gas industry. The facility is now 92% completed, he said.

“The delay in the project has been because in order to make the LNG hub terminal commercial we had to have the power station operational. In order to have the power station operational, we had to connect to the transmission lines,” he said.

“The delay came about because the funding banks insisted that we finalize the right of way to make sure that we could connect the power station to the transmission lines. That’s now being done and that’s why we now have the confidence that we’ll be up and running in the near future.”

Ahead of the completion of the LNG facility, EWC plans to source the fuel for its power plant initially from the spot market.

Mr. Elliott said EWC is developing its own LNG production in Indonesia where it has production-sharing contracts with the Indonesian government.

“But we’re also developing projects in the USA so that we can avail ourselves of some of the world’s most economically priced gas and as a long-term solution, we will be looking to bring that gas to the Philippines,” he said.

Despite the delay, there had been no changes in the components or capacity of the project.

“It’s going to be initially the first tank is 1,300 cubic meters of LNG. The second tank will be another 1,300 cubic meters of LNG. The first power station is two units of 200 MW each gas turbines and they will be linked with a 250-MW steam turbine when it’s in combined cycle phase so that would be 650 MW. And in the future we would like to add further expansion of the power generation at the site,” Mr. Elliott said. “We’d like to just keep repeating units up to possibly 3,000 MW.”

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

“We’re the arranger for the financing for them. We have actually gotten approval previously on the project. Unfortunately that did not pan out due to other circumstances. So we’re looking at it again and hopefully this time we’ll see it through,” he said.

Mr. Chua said DBP is syndicating the financing with several banks, but declined to disclose the loan amount.

He said the certification from the Department of Energy (DoE) that the Pagbilao power plant is an energy project of national significance would help, but the loan application would be evaluated based on the company’s capacity to complete the construction, ability to pay back, and the necessary regulatory approvals.

Patrick T. Aquino, director of the DoE’s Energy Policy and Planning Bureau, confirmed that EWC had been granted the certification but only for the power plant component.

“EWC has an integrated LNG-plus-power plant. The one that was awarded a certificate of EPNS (energy project of national significance) was for the power plant component,” he said.

Mr. Elliott said the certification would bring “tremendous benefit for us.”

“It helps all of the ancillary players such as NGCP (National Grid Corporation of the Philippines) to achieve their permitting, for instance, with the construction of the new substation. So it will help those players that are ancillary to the project make sure that they meet their deadlines as well,” he said.

  • Renewables

EDC inks deal to supply clean energy

12 December 2018

 – 

  • Philippines

THE Energy Development Corp. (EDC) has signed a two-year agreement to supply Citizen Machinery Philippines, Inc. with geothermal energy for the latter’s facilities in Tanauan City, Batangas province.

Under the deal, which shall commence on December 26, EDC shall provide Citizen Machinery Philippines with 2.5 megawatts (MW) of electricity from the company’s BacMan geothermal project.

EDC, through its unit Bac-Man Geothermal, Inc. (BGI), owns and operates 150-MW geothermal power plant in Bacon, Sorsogon City and Manito, Albay province.

“As a manufacturing company, Citizen Machinery Philippines desires to be supplied by stable and low-cost electricity, especially since our foundry consumes much power,” Citizen Machinery Philippines President Akihide Kanaya said in a statement.

“EDC’s BacMan geothermal project meets these criteria. At the same time, we remain committed to give our customers the highest level of satisfaction as possible,” he added.

“This includes making sustainable contributions to society through innovative manufacturing solutions, while recognizing our impact to the environment. Choosing to be powered by 100-percent renewable energy strongly supports this commitment.”

The agreement comes a month after EDC signed a deal with Continental Temic Electronics Philippines to supply 2.7 MW of geothermal power, also sourced from the BacMan project.

Formerly Miyano Philippines, Inc., Citizen Machinery Philippines manufactures and assembles automatic lathe machines, which produces other machines for use in different industries. It is a subsidiary of Citizen Holding Co. Ltd.

EDC is into exploring, developing, operating, and using geothermal energy and other indigenous renewable energy sources to generate electricity. It has an installed capacity of 1,471.8 MW.

  • Energy Cooperation , 
  • Energy Economy , 
  • Others

TNB shares slip despite renewable energy deal in India

12 December 2018

 – 

  • Malaysia

PETALING JAYA: (TNB) shares slipped 0.1% to RM13.54 despite entering into a partnership to grow its renewable energy (RE) portfolio.

Tenaga Nasional (TNB) had entered into an agreement to subscribe to a compulsorily convertible debenture (CCD) issued by India’s GMR Bajoli Holi Hydropower Pte Ltd (GBHH) for 2.26 billion Indian rupees (RM133.2mil).

The proposed investment of 2.26 billion rupees will be funded via a combination of internally generated funds and borrowings.

The CCD has a tenure of 30 years and will be converted into a 30% equity stake before the end of tenure.

This is to facilitate GBHH’s construction of a 180MW run-of-river hydroelectric power plant within the Himalaya range in the state of Himachal Pradesh, India.

Overall progress of the project stands at 78% and the plant is expected to commence its commercial operations by October 2019.

The agreement was inked with GBHH, GMR Energy Ltd and GMR Infrastructure Ltd.

According to PublicInvest Research, the 30% equity acquisition will not have a significant impact on TNB’s earnings in the near term.

Hence, the research house is maintaining its forecasts and estimates on TNB.

“We understand that the hydroelectric power plant project offers attractive and stable returns with a 17-year power purchase agreement with a reputable AA-rated offtaker.

“This acquisition will fit into TNB’s expansion plan to increase its RE portfolio.

“Once fully operational, the proposed investment will raise TNB’s total international RE portfolio to an estimated 370MW,” said PublicInvest Research.

Meanwhile, Nomura Research expects TNB’s profit after tax and minority interest to increase by 11% and 6% in financial years 2019 and 2020 (FY19 and FY20), respectively.

This is will be mainly driven by a steady rise in power demand and absence of impairments reported in the first nine months of 2018.

“As generation project capex cycle ends, we estimate free cash flow yield will rise to 7.3% in FY20, in line with Asean utility peers.

“Malaysia’s power demand was weak from the second quarter of FY17 to the end of FY17, averaging just 0.2% year-on-year during the period.

“However, we have seen a decent recovery in power demand over the past three quarters, with average power demand growing by about 2.7% year-on-year compared to regulatory period two power demand growth assumption of 1.8% to 2% during FY18 to FY20.

“Most of the revival in power demand is attributable to the industrial sector in the past two quarters,” said Nomura Research.

  • Energy Cooperation

The need for renewable energy cooperation

12 December 2018

 – 

  • ASEAN

In October, the United Nations (UN) released a report which highlighted that the world could be on the brink of a climate change disaster if immediate measures are not taken. Leading scientists behind the report have said that the world only has 12 years to keep global warming at a maximum of 1.5 degrees Celsius or it could face a risk of severe drought, flooding and extreme heat for millions of people.

The effects of climate change have already been seen in the region. Alex Chapman, a research fellow in human geography and the head of department of water resources at Can Tho University wrote that Vietnam’s Mekong Delta – home to 18 million inhabitants – is one of the world’s most vulnerable places to climate change. Other experts working in the Mekong have shared the same concerns, pointing out that rising waters, storm accentuation and on-shore salinity are the main factors endangering the populations surrounding the river.

One of the key ways to combat climate change is by using renewable energy instead of being reliant on fossil fuels, natural gas or coal since most renewable energy sources produce very little or zero global warming emissions.

In a joint statement released by the Association of Southeast Asian Nations (ASEAN) and the International Renewable Energy Agency (IRENA) last September, ASEAN has set a target of securing 23 percent of its primary energy from renewable sources by 2025.

This target may seem ambitious but with better cooperation among ASEAN member states, it could become a possibility. The ASEAN Centre for Energy (ACE) has released a study on regional renewable energy cooperation in ASEAN in hopes that it would help strengthen discourse on renewable energy cooperation within the region.

The paper highlighted that cost-reductions on renewable energy would be one of the major benefits of renewable energy cooperation in ASEAN. With more cooperation among member states, it could help remove barriers to obtaining permits, which the study points out is one of the primary causes of delay for renewable energy development. This would then also cut developer costs. Lower costs could attract more investment for renewable energy within the region.

Source: Various

According to the ACE study, regional renewable energy can also enhance energy security as it reduces import dependencies. Energy security refers to the availability of energy at affordable prices. As countries invest more in renewables, they would be less dependent on energy imports to fuel their nation’s energy consumption needs. For example, ASEAN members with similar energy security challenges can coordinate the development of renewable energy in the region. Overall, this would improve the energy mix and grow their energy security.

Regional cooperation is imperative if ASEAN wants to achieve their renewable energy target for 2025. One of the benefits of cooperation among ASEAN states with regards to renewable energy is that it would create space for dialogue and better coordination. The European Union (EU) has a similar framework, dubbed the “CA-RES” programme, which provides a forum for EU nations to exchange knowledge and to put into practice examples of the implementation of renewable energy policies.

ASEAN have already made positive moves towards more cooperation within the region for renewable energy. ASEAN and IRENA signed a Memorandum of Understanding (MoU) in September last year for long-term cooperation between the two bodies and to harness ASEAN’s renewable energy potential.

ASEAN is also implementing the ASEAN Power Grid, which aims to enhance electricity trade across regional borders – complementing the rise in demand for electricity. The ASEAN Power Grid looks to integrate infrastructure that is both, clean and sustainable. One of the projects under the ASEAN Power Grid is the Laos-Thailand-Malaysia-Singapore Power Integration Project. This project involves Malaysia purchasing up to 100 megawatts (MW) of hydro power from Lao PDR through Thailand’s transmission grid. This is beneficial for Malaysia because it would also improve the share of sustainable energy in their total energy mix.

The study by ACE also shows that while there can be huge benefits from regional cooperation, there are also strong obstacles which could impede them. One of the biggest challenges is financial constraints. The study shows that the deployment and transfer of renewable energy technologies requires large funding. It was reported in the media last year that half of Southeast Asia’s renewable energy projects are not financially viable.

This poses a serious problem if ASEAN wants to meet its target by 2025. Especially with IRENA reporting that the region’s energy demand has grown by 60 percent over the past 15 years, and is only expected to keep on growing. Clearly, ASEAN governments need to seriously consider renewable energies when planning their energy mix.

  • Oil & Gas

ERC poised to reconfirm Glow ruling

12 December 2018

 – 

  • Thailand

PTT’s Global Power Synergy wants to obtain Engie Group’s Glow Energy Plc, but regulators have turned down the proposal on anti-trust grounds.

The Energy Regulatory Commission (ERC) is likely to adhere to its recent resolution to derail a takeover effort made by PTT’s unit Global Power Synergy Plc (GPSC) for Glow Energy Plc.

ERC chairman Samerjai Suksumek said board members who participated in the meeting on Dec 7 had reconfirmed blocking the takeover deal, but the decision was not finalised because some members were absent.

The energy regulator’s board met Tuesday afternoon and the resolution will be announced on Thursday, he said.

The ERC on Oct 10 blocked the deal, saying it breached the Energy Industry Act’s standards for a monopoly because the deal would let GPSC control the largest market share of private power purchase agreements (PPPAs) at Map Ta Phut Industrial Estate in Rayong province.

The ERC cited the act’s Section 60, which prohibits monopolies that reduce or limit competition in energy service.

In June, GPSC agreed to purchase 69.11% of Glow’s shares from French-based Engie Group.

The remaining 30.89% of shares were to be bought through a tender offer.

The deal had an estimated value of 139 billion baht.

Under the plan, GPSC was to own 80% of PPPAs in the Map Ta Phut area. Before the takeover began, GPSC controlled 20% and Glow had 60%, with the remaining 20% held by the Provincial Electricity Authority (PEA).

Separately, the ERC will issue new regulations to facilitate the “prosumer” concept, also known as peer-to-peer power trading among consumers, in 2019.

Mr Samerjai said the ERC plans to unlock private and household sectors to participate in the energy sector in line with the country’s energy reform plan.

Solar rooftops are among the crucial projects that the ERC is prepared to launch for 10,000 megawatts over the next 20 years.

This means both sectors will be able to sell surplus electricity from their solar rooftops to the state grids and other properties.

This, is in line with the tentative national power development plan (PDP) in the new revised version, targets allowing private firms or households access to the sector and to peer-to-peer power trade.

Several energy firms have emphasised the need for power trade in communities and residential projects, and in industrial estates such as BCPG Plc and GPSC for pilot projects.

Mr Samerjai said the ERC is open to any firms and state utilities entering discussions before new regulations are issued involving electric vehicles (EVs) and charging stations.

“The adoption of EVs is widespread in the Thai market, and several state agencies and companies are trying to expand their charging stations in Bangkok over the last three years,” he said. “The relevant regulations will be issued next year to facilitate participation for this sector.”

Mr Samerjai said the new version of the power development plan (PDP) is expected to complete public hearings and undergo a final decision by the National Energy Policy Council in early January.

The ERC will then revise the power rate.

“Blockchain is being used in several countries, so Thailand cannot avoid this trend,” Mr Samerjai said.

In addition, the ERC will issue regulations for the liquefied natural gas (LNG) business.

The new LNG business model will shift to transporting LNG by road from ships.

Mr Samerjai said LNG supply is necessary given limited gas pipelines for compressed natural gas.

“The ERC plans to issue licences for this new business,” he said. “LNG is imported by PTT Plc, and the Electricity Generating Authority of Thailand will be the second importer.”

The gas pipeline will be gradually depleted as LNG imports expand in the future.

  • Energy Cooperation , 
  • Energy Economy

Myanmar energy firm plans $35m investment

12 December 2018

 – 

  • Myanmar

DRIVEN by its vision to become an innovative leader in Myanmar’s growing energy sector, locally-owned Parami Energy Group of Companies plans to invest US$35 million (Bt1.15 billion) in its LPG (liquefied petroleum gas) business over the next three years, according to Group CEO Ken Tun, aka Pyae Wa Tun.

He told a media roundtable on Monday the firm has invested 15 billion kyat (Bt318 million) so far, and will spend an additional $25 million to expand its LPG business. He seemed confident the LPG business would be the main driver of the firm’s growth in the long term.

The investment will be used to build a modern energy architecture for the people of Myanmar, bringing safe, reliable and affordable energy to communities across the nation through initiatives such as LPG projects and rural mini-power-grids, Ken Tun said.

“The outlook for LPG business is really bright here in Myanmar. We see much room for improvement because Myanmar’s current LPG usage is 40 times lower than our neighbouring country, Thailand,” he said, citing official figures that showed Myanmar’s LPG consumption is less than 100,000 tonnes per year, compared to Thailand’s 4 million tonnes.

“Our plan is to distribute LPG to nearly two million households by 2020. By doing so, we can also contribute to the livelihoods of women living in rural areas while providing efficient and environment-friendly energy solutions across the nation,” he said.

In the initial phase, the firm will distribute LPG to nearly 150,000 households by the end of this month. As part of its social commitment, the firm will hire only women as their distribution agents.

“We will start with all the townships in Yangon region. Our core strategy is to appoint female distributors only, with an aim to improve their livelihoods. By doing so, we play an active role in women’s empowerment, as the female agents can earn an average income of between 300,000 kyat (Bt6,342) and 500,000 kyat (Bt10,568),” he said.

Ken said the firm has partnered with Thailand’s Sahamitr Pressure Container Plc (SMPC) to distribute LPG in Myanmar.

“We decided to buy SMPC products, though they are more expensive than those of Chinese companies. When it comes to LPG, safety is most important, and we trust in their products because SMPC is one of the leading LPG container manufacturers in the world,” he said.

Parami Energy is one of the only two Licence A holders in Myanmar eligible to import and sell LPG from foreign countries. Currently, the majority of LPG used in Myanmar is imported from Thailand, Malaysia and Indonesia. The firm also looks to import LPG from the Middle East in the years to come. In late 2017, the firm was permitted by the government to manage and operate a state-owned LPG terminal in Thanlyin.

Following extensive remedial work, LPG imports via the marine jetty commenced in February.

“At this point, we are heavily investing in LPG marketing as well as the downstream distribution infrastructure via state-of-the-art systems and equipment,” said Ken Tun.

Last month, the firm opened Myanmar’s first-ever community kitchen to use LPG, locating it in the Pa-O autonomous zone in southern Shan state. The firm plans to set up additional community kitchens in other parts of the country, with the second one scheduled to open in Magway region next year.

“If we could develop an environmentally friendly fuel source that would allow us to curtail the rates for electricity and other fuels, people would have the chance to reduce their electricity costs, and the forest coverage would also widen,” he said.

According to Ken Tun, cutting the forests for fuel to be used in cooking will lead to the deforestation of Myanmar, so the government has to subsidise millions of dollars yearly to pay for electrification.

“For our forests, rivers and natural blessings to be sustainable, we need to find an alternative reliable source of energy. And it is none other than LPG,” he said.

  • Others , 
  • Renewables

ADB invests $155 million in Thai green bonds

12 December 2018

 – 

  • Thailand

The Asian Development Bank (ADB) plans to invest 5 billion Thai baht (US$155 million) in Thailand-based B.Grimm Power Public Company Ltd via five- and seven-year green bonds. Reportedly, the bonds are the first certified climate bonds issued in the country.

According to the bank, the proceeds have been earmarked for nine operational solar PV plants with a cumulative rating of 67.7 MW, and for an additional 30.8 MW, which are currently still under construction.

“This issuance will foster the development of the green bond market in Thailand by showcasing international best practice for genuine green and climate bonds,” said B.Grimm Power president Preeyanart Soontornwata. “ADB’s support was invaluable to ensure the bonds comply with the International Capital Markets Association Green Bond Principles and Climate Bond Initiative standards, building on a long-standing relationship we have forged through multiple transactions.”

Michael Barrow, director general of ADB’s Private Sector Operations Department believes the green bond will help the country to achieve its goal of reducing greenhouse gas emissions by 20% by 2030.

Overall, the bank lauds B.Grimm’s renewable energy efforts and names it a pioneer of low-carbon growth in Thailand.

B.Grimm is said to be one of Thailand’s largest private power producers. Aside from 15 gas-fired power stations, the company also operates 15 solar assets. In July, the company signed a loan agreement with ADB to expand its renewables portfolio from 10% to 30% of its generation by 2021.

At the time, ADB subscribed to 123 million of B.Grimm’s shares worth 1.968 Thai baht ($57.7 million) and announced that it would administer a loan of another $20 million from the Canadian Climate Fund. The investment was destined for 114 MW of solar PV capacity and 16 MW of wind power, as well as additional projects in Cambodia, Indonesia, Laos, Myanmar, Philippines, Thailand and Vietnam.

Last December, IRENA and the Ministry of Energy of Thailand released a report suggesting that Thailand’s share of renewable energy could surpass its target by 2036.

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ASEAN Centre for Energy (ACE) is an intergovernmental organisation within ASEAN structure that represents the 10 ASEAN Member States’ (AMS) interests in the energy sector.

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