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Electricity/Power Grid ,
Oil & Gas

PV Gas to provide LNG for two Nhon Trach power plants

16 January 2019

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Vietnam

Hanoi (VNA) – The PetroVietnam Gas Corporation (PV Gas) will be a supplier of liquefied natural gas (LNG) for the Nhon Trach 3 and 4 power plants under a framework agreement between the firm with the PetroVietnam Power Corporation (PV Power).

Speaking at the signing ceremony on January 10, Deputy Minister of Industry and Trade Dang Hoang An affirmed that the Nhon Trach 3 and 4 power plants, invested by PV Power, will be the first power plant chain in Vietnam using imported LNG for producing electricity.

With a combined capacity of 1,500MW, it is hoped the plants will meet the increasing power demand in key economic areas in the Southeast region.

According to representatives from PV Gas, domestic gas resources are declining. They forecast that Vietnam will begin to have a shortage of over 2 billion cu.m of gas per year by 2023.

The shortage of gas would continue to increase rapidly to over 7 billion cu.m per year in 2030 and 9 billion cu.m per year in 2035, especially in the Southeast region.

They said LNG is the solution for maintaining economic growth and promoting socio-economic development in the coming time.

With a designed capacity of 1 million tonnes of LNG per year, the LNG Thi Vai Terminal – which is invested in by PV GAS and scheduled to be completed in 2021-2022 – will be an important link in supplying regasified gas for many consumers, including the Nhon Trach 3 and 4 power plants.

According to Deputy General Director of the Vietnam Oil and Gas Group (PetroVietnam) Nguyen Quoc Thap, PetroVietnam will continue to provide its support for the LNG projects, aiming to complete them on schedule and ensure their highest efficiency.

As key units of PetroVietnam, PV GAS and PV Power will continue to promote their cooperation to develop economic value chains, as well as development orientations for the local electricity and LNG industries in the future.

Since providing the first gas flow to the Nhon Trach 1 power plant so far, PV GAS has provided PV Power with 12.7 billion cu.m of gas for producing electricity.

After completing procedures, PV GAS and PV Power will sign an official contract, connecting the Nhon Trach 3 and 4 power plants to the national grid. –VNA

Renewables

Vietnam abandons net-metering method for rooftop solar projects

16 January 2019

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Vietnam

Buyers now need to directly pay for the electricity they receive from sellers.

Vietnam will change the trading method for rooftop solar projects by replacing the net-metering method with the direct consumption-direct supply method. It issued Decision No. 02/2019/QD-TTg which amends some points in Decision No. 11/2017/QD-TTg.

Previously, electricity sellers that sourced from rooftop solar projects were required to sell to consumers based on the net-metering method with two-way electricity meters.

Waewpen Piemwichai, attorney at Tilleke & Gibbins International, explained, “If the amount of electricity generated from rooftop projects was greater than the amount consumed by the seller, the surplus would be carried forward to the next trading cycle. At the end of the year or upon termination of the contract, any surplus electricity would be sold to the buyer at a specified price.”

With the new method, buyers will now directly or separately pay for the amount of electricity they receive from rooftop project sellers. Sellers also need to directly pay for the electricity they receive and consume from the power grid.

Decision 02 also removes the condition that the electricity is sold to the buyer once a year, at the end of the year, or when the contract is terminated, Piemwichai noted.

Additionally, changes were made in the responsibilities of government agencies. The Ministry of Industry and Trade (MoIT) will now promulgate the regulations on the connection of solar projects, and it will no longer be required to give instructions on the calculation of the net-metering mechanism.

MoIT will also be required to give instructions on how to calculate purchase prices for solar projects according to the VND-USD exchange rate instead of imposing adjusted purchase prices.

The requirement for the Ministry of Finance to consider amending regulations on the exemption of rooftop projects from taxes and fees will also be let go.

Oil & Gas

Perisai Petroleum Teknologi set to exit Bursa, shares plunge 83%

15 January 2019

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Malaysia

The axe has fallen on another listed oil and gas (O&G) company as Bursa Malaysia Securities Bhd rejected Perisai Petroleum Teknologi Bhd’s regularisation plan, opening the way for its exit from the local stock market.

The 2014 oil price rout had claimed many O&G-related companies, with Perisai being the latest victim.

Investors dumped Perisai’s shares following the announcement, pushing the share price to 0.5 sen, or 83.33%, erasing RM31.53 million in market capitalisation in yesterday’s trade alone. The company is now valued about RM6.3 million.

Perisai’s shares will be suspended with effect from Jan 22, 2019, and it will be de-listed on Feb 13, 2019, unless an appeal against the rejection of the regularisation plan and delisting is submitted to Bursa Malaysia on, or before Feb 10, 2019.

As part of the proposed regularisation plan, Perisai is relying on its existing two core business segments, the offshore drilling and offshore production (operating the offshore drilling rig PP101), as well as the floating production storage and offloading (FPSO), Perisai Kamelia, to turn-around the company’s financial woes.

However, Bursa Malaysia said the Perisai Kamelia, owned by Perisai’s subsidiary Emas Victoria (L) Bhd, has not been chartered since the end of May 2017, while the charter for the PP101 rig, owned by Perisai’s subsidiary Perisai Pacific 101 (L) Inc, is due to expire in May 2019.

The viability and sustainability of Perisai’s core businesses are dependent upon the ability of the company to continue to charter both the FPSO and PP101 rig at viable rates.

“As the historical charter rates of these assets have been on a decline, the FPSO has not been chartered and thus the charter rate and period, as well as the extension of the charter for PP101 rig have not been determined and/or are uncertain, the company and the principal adviser have not satisfactorily addressed Bursa Malaysia’s concerns on the viability and sustainability of the core business of the company,” Perisai said in a statement to the exchange.

In addition, the lenders of Emas Victoria have a right to require the disposal of the FPSO in the event the asset is not chartered by Dec 31, 2018.

The lenders of Perisai Pacific also have a right to require the company to dispose of the PP101 rig in the event the PP101 rig is not chartered for a continuous period of 12 months.

“As the assets are currently not chartered, or the existing PP101 rig charter will expire in May 2019, there are concerns/uncertainties on the ability of the Perisai group to maintain and retain its core assets and continue to have a viable business in the event the assets are disposed of,” it added.

Perisai is the first O&G company to be de-listed this year.

Last year, special-purpose acquisition company (SPAC) Sona Petroleum Bhd was officially de-listed after failing to secure a qualifying acquisition within the three-year deadline from its July 30, 2013, listing date.

This was in spite of the would-be O&G company rai-sing some RM550 million from its initial public offering to acquire an income-generating asset.

Another O&G-based SPAC, Cliq Energy Bhd, is set to pay the RM6.12 million held in its cash trust account to shareholders at the end of the month before de-listing after similarly failing to complete its qualifying acquisition.

Meanwhile, O&G company Bumi Armada Bhd is also undergoing a debt restructuring scheme

Electricity/Power Grid

Government actively looking into electric vehicles, minister says

15 January 2019

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Myanmar

HE Ministry of Industry will encourage the manufacturing of electric vehicles in spite of the difficulties involved, said Minister of Industry U Khin Maung Cho.

He said this at an event organised by local car assembler Dagon Arman Thit Co to launch three new car models in the local market on Sunday.

Dagon Arman Thit Co is working with South East Motor Co Ltd (Soueast) of China to assemble semi-knocked-down cars. Soueast holds a 25 percent stake in Japan’s Mitsubishi Co, which will jointly manufacture the automobiles according to the Mitsubishi standard. The companies are assembling three new car models for the local market.

“We must encourage efforts to bring in products that are really needed for the country in ways that also create job opportunities. We should acknowledge those who are able to do so,” said U Khin Maung Cho.

“I know there are also plans to manufacture electric cars, which are important in protecting the environment, and these cars will be manufactured soon. It is a good omen for the country,” he added.

The Ministry of Industry will encourage manufacturing electric cars even though there are many difficulties and challenges in manufacturing electric cars, U Khin Maung Cho said.

“When something new is made, people might think how alternative-fuel vehicles will be produced when the country doesn’t have enough electricity. But there will always be doubts. We just need to have confidence and find good partners with technology,” said U Khin Maung Cho.

Oil & Gas

Pertamina says crude purchases from Chevron, others to cut oil imports

15 January 2019

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Indonesia

JAKARTA, Jan 15 (Reuters) –

* Pertamina to buy 2.5 million barrels of crude per month from Chevron Pacific Indonesia in January-June 2019 – joint statement

* Pertamina crude purchases from Chevron and other companies to cut its crude imports to around 250,000 barrels per day (bpd) from 342,000 bpd (Reporting by Bernadette Christina Munthe and Wilda Asmarini Editing by Ed Davies)

Electricity/Power Grid

Meralco announces drop in power rates this January

15 January 2019

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Philippines

MANILA, Philippines — To start the new year, Meralco announced that overall electricity rates decreased to P9.8385 per kWh this month from last month’s P10.1803 per kWh. The downward adjustment of P0.3418 per kWh will mean a decrease of around P68 in the total bill of a typical household consuming 200kWh.

Lower PSA charges

From P5.3303 per kWh last month, the generation charge for January went down to P4.9119 per kWh, a decrease of P0.4184 per kWh.

The decrease is mainly the result of a P1.2293 per kWh reduction in the cost of power from Meralco’s Power Supply Agreements (PSAs). The share of PSAs to Meralco’s total requirement this month was at 40 percent.

Joe Zaldarriaga, public information office head for Meralco, said that “lower PSA charges were brought about by a reduction in capacity fees as a result of the annual reconciliation of outage allowances done at the end of each year under the PSAs approved by the Energy Regulatory Commission (ERC).

“The early completion of annual capacity payment for Sual Unit 1, Ilijan, Pagbilao Unit 1 and PEDC resulted in savings immediately passed on to consumers by way of lower electricity rates. The capacity fees of PSAs will return to normal levels in January that will impact on February bills after the downward adjustment in December,” Zaldarriaga added.

Charges from the Wholesale Electricity Spot Market (WESM) also went down by P0.0165 per kWh due to improvement in the Luzon power situation. The demand for power in the Luzon grid decreased by 101 MW.

Meanwhile, cost of power from the Independent Power Producers (IPPs) went up by P0.0847 per kWh due to peso depreciation. About 92 percent of IPP charges are dollar denominated. WESM and IPPs provided 18 percent and 42 percent of Meralco’s supply needs, respectively.
Transmission charge increases

Transmission charge of residential customers increased by P0.1210 per kWh this month due to higher NGCP Ancillary Services Charges. Taxes and other charges, however, went down by PhP0.0444 per kWh this month.

Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 42 months, after these registered reductions in July 2015. Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges.

Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP. Taxes and other public policy charges like the FIT-All rate are remitted to the government.
Energy efficiency tips

Meralco once again encourages its customers to continue practicing energy efficiency initiatives to help manage their electricity consumption. These include everyday household tips that may help save energy, such as:

unplugging appliances when not in use to avoid “phantom load”
using the aircon at mid-setting or at 25-degree Celsius for maximum efficiency
using a power board or strip which can supply power to several appliances at once and allows a user to conveniently turn them off simultaneously with just one switch, and
maximizing natural light during daytime and keeping appliances well maintained to ensure optimal performance.

Energy Economy

Philippine bank establishes green finance framework

15 January 2019

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Philippines

One of the Philippines’ largest banks, Rizal Commercial Banking Corporation (RCBC), on January 14 announced the establishment of its green finance framework to provide the basis for the issuances of green bonds and loans, which can be denominated in pesos or in any other currency.

Proceeds from any green financing exercise under the framework will be used to finance or refinance a portfolio of green-eligible projects relating to renewable energy, green buildings, clean transportation, energy efficiency and pollution prevention and control that contributes to the reduction of the environmental footprint in the Philippines.

RCBC’s green finance framework is the first in the Philippines to be aligned with the Asean Capital Market Forum’s Asean green bond standards 2018. The framework is also aligned with the green bond principles 2018 of the International Capital Market Association and the green loan principles 2018 of the Loan Market Association and the Asia-Pacific Loan Market Association.

In setting up the framework, RCBC CEO Gil Buenaventura says the bank recognizes the importance of developing greater environmental awareness and social responsibility through its operations and the businesses it serves.

RCBC believes that balancing non-financial factors such as environmental and social issues with financial priorities is essential to good corporate citizenship and is fundamental to risk management and the protection of its investors and shareholders. The bank has been an active proponent in the renewable energy space, having provided substantial financing support to a number of landmark projects in the Philippines and the rest of Southeast Asia.

For instance, in August 2018, RCBC was tapped as the sole lender and RCBC Capital Corporation as the sole mandated arranger in the US$211.50 million project finance debt facility to fund the 300MW solar energy project of BIM Renewable Energy Joint Stock Company of Vietnam. The project is a joint venture between one of Vietnam’s leading business groups BIM Group and AC Energy Holdings of the Philippines, and the transaction was the first major cross-border project finance deal by RCBC in Vietnam.

RCBC was also a lender in the Star Energy consortium’s acquisition of Chevron’s geothermal and power business in Indonesia and the Philippines in 2017.

Sustainalytics, a leading global provider of ESG research and rating, has reviewed the framework and concluded it is credible, robust and transparent. It is not only aligned with market best practices, but also contributes to the UN Sustainable Development Goals on affordable and clean energy, making cities and human settlements inclusive, safe, resilient and sustainable, and on responsible consumption and production

RCBC has mandated ING as the sole green structuring adviser for its green finance framework

Oil & Gas

P2.30 price hike for diesel

15 January 2019

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Philippines

MANILA, Philippines — Another major fuel price hike takes effect today – the second in two weeks this month – in step with rising crude costs in the world market.

The second tranche of the fuel excise tax under the Tax Reform for Acceleration and Inclusion (TRAIN) law has nothing to do yet with the latest increase, industry players emphasized.

Oil companies announced upward adjustments in the pump prices of diesel at P2.30 per liter; gasoline, P1.40, and kerosene, P2. It was the highest mark-up for diesel in recent history.

In separate text advisories yesterday, Caltex Philippines and Eastern Petroleum said their price increases were to take effect after midnight last night.

“Price adjustment only factors the increase in world oil prices and not the second tranche of the TRAIN law,” Eastern Petroleum said.

Jetti Petroleum, Petro Gazz, Pilipinas Shell Petroleum Corp., PTT Philippines Corp. and Total Philippines Corp. said their respective price adjustments took effect at 6 a.m.

“This is not yet the effect of the fuel excise tax, but merely a reflection of the movement of international crude prices,” Petro Gazz said in its advisory.

“These reflect the changes in the prices of petroleum products in the world market and does not yet include the additional taxes under the TRAIN law,” Phoenix said in its advisory.

Meanwhile, Flying V, Phoenix Petroleum Philippines Inc., Petron Corp., Seaoil Philippines Inc. and UniOil Petroleum Philippines Inc. have yet to announce their price changes.

Department of Energy-Oil Industry Management Bureau assistant director Rodela Romero said reduction in supply approved by the Organization of Petroleum Exporting Countries (OPEC) explained the surge in local pump prices.

“The reason for increase is the implementation of supply cut by OPEC which started this January to June by 1.2 million barrels per day,” she said in text message.

Another factor that pushed global prices higher is the resumption of the US sanction against Iran, Romero said.

So far, only 469 of the 8,600 gas stations nationwide have factored in the second tranche of the TRAIN excise tax in price adjustments.

Of the total, 371 are from Petron, 29 from Flying V, 68 from Shell and one from Caltex, Romero said.

Under the second tranche of TRAIN implementation, an additional excise tax of P2 per liter will be imposed on diesel and gasoline, and P1 per kilogram on household LPG.

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