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Oil & Gas

Energy minister pledges Round 21 licences by mid-year

26 March 2019

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Thailand

Energy Minister Siri Jirapongphan (left) awards contracts to Mr Phongsthorn Thavisin for PTTEP’s E&P bids for the Erawan and Bongkot fields.

Round 21 of new licence issuance for offshore exploration and production (E&P) of petroleum resources is expected to open in June.

This new petroleum round will open for offshore resources only in the Gulf of Thailand, following the signing of contracts for the offshore Erawan and Bongkot gas fields yesterday, said Energy Minister Siri Jirapongphan.

Onshore locations, mainly covering northern, northeastern and central provinces have yet to be concluded due to legal obstacles for many public lands that have petroleum underground.

The Mineral Fuels Department was told to prepare a Round 21 plan to invite interested investors, said Mr Siri.

Round 21 has been delayed since October 2014 due to political instability and an economic slowdown.

Many advocates called for a delay and revision of the country’s petroleum laws from an E&P concession to a production-sharing contract.

In June 2017, two revised laws — the Petroleum Act and Petroleum Income Tax Act — were enacted. The government then opened bidding for the Erawan and Bongkot gas fields in 2018.

He said tentative conditions for Round 21 will be similar to the latest Erawan and Bongkot bids. More importantly, the round will include production-sharing contracts and 25% ownership for Thai state enterprises.

This move is also set to expand oil and gas reserves in the country as there have been no new E&P activities for over a decade.

There are many E&P offshore petroleum operators such as PTT Exploration and Production Plc (PTTEP), Chevron Thailand Exploration and Production Limited and Mubadala Petroleum among others.

In a related development, the Mineral Fuels Department on Monday awarded the production-sharing contract for Erawan gas field to PTTEP and MP G2 Thailand.

For the Erawan (G1/61), PTTEP has 60% ownership, while MP G2, Mubadala Petroleum’s subsidiary, owns the remainder.

The department awarded the contract of Bongkot (G2/61) for PTTEP, the sole bidder for this gas field.

Both offshore Erawan and Bongkot gas fields each have 10-year contracts, selling to the state at 116 baht per million British thermal unit, compared with almost 200 baht for the latest contracts.

“After two existing concessions expire in 2022 and 2023, the new prices will positively impact gas users for 10 years, with a combined net worth of 550 billion baht,” said Mr Siri.

The gas cost for power generation will be cut by 200 billion baht, reducing the fuel tariff by 15-20 satang per kilowatt-hour.

Many gas products from the Erawan and Bongkot fields will decrease in price for 10 years such as cooking gas (150 billion baht), natural gas (100 billion baht) and petrochemical (100 billion baht).

Phongsthorn Thavisin, PTTEP’s president and chief executive, said PTTEP is ready to begin the takeover transition for Erawan field from US-based Chevron.

PTTEP runs the Bongkot concession.

“PTTEP will set up a team to smooth synchronisation during 2021-22 as the Erawan concession approaches expiry in order to avoid gas production interruption,” said Mr Phongsthorn.

PTTEP allocated a massive budget of more than 1 trillion baht for two new 10-year contracts — 700 billion baht for Erawan and 400 billion for Bongkot.

Mr Phongsthorn said the gas sales price PTTEP offered the state has been estimated at an appropriate level (116 baht) and will allow PTTEP to gain margins from two gas fields.

The Erawan and Bongkot fields can trim production costs due to greater gas production volume in the future.

PTTEP forecasts the production cost of two fields will average US$30 per barrel of oil equivalent.

PTTEP plans to invite new strategic partners for a joint venture in two gas blocks in the future, said Mr Phongsthorn.

Electricity/Power Grid

LGUs press electric coops to pay real property tax

25 March 2019

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Philippines

SORSOGON CITY — Electric cooperatives (ECs) nationwide are now being pressed by local government units for payment of their real property taxes (RPT) following the issuance of a ruling by the Supreme Court, which declared sub-stations and other coop assets as taxable.

In an interview Monday, Edwin Garcia, general manager of Sorsogon I Electric Cooperative (SORECO I) based in Irosin, Sorsogon, said LGUs had already levied them and were demanding payment. The power cooperative has a PHP30-million outstanding arrears in RPT, he noted.

According to him, this is the reason electric cooperatives had filed a petition with the energy Regulatory Commission (ERC), through the Philippine Rural Electric Cooperatives Association (Philreca), last October 2018 for an authority to pass on RPT payments to their member-consumers.

“It’s a big burden on the part of ECs since we are not allowed to generate profit, we are non-profit that’s why we don’t have surplus funds for tax payments, so we are appealing to the ERC to grant the petition,” he added.

However, the ERC suspended the initial hearing on the petition scheduled last March 14 for the establishment of jurisdiction.

This, after advocacy groups held a rally on the hearing day in front of the ERC main office to express their opposition to the petition filed in behalf of its 121 member-distribution utilities nationwide.

The ERC had also scheduled on that day the public consultation for Luzon stakeholders. Public consultation for Mindanao was set on March 22 and April 2 for the Visayas stakeholders.

Philreca wanted ERC to adopt the rules formulated by the petitioner for the “pass-through of real property tax” as it argued that ECs have no surplus funds to which they could charge the RPT payments.

The petitioner stressed that adopting the rules is “valid and timely considering the fact that local government units (LGUs) had assessed and collected RPT payments from ECs”.

It pointed out that the Supreme Court had already ruled that ECs are not exempted from paying RPTs as enunciated in the case of “Manila Electric Company vs. The City Assessor and the City Treasurer of Lucena City”.

The SC ruling stated that transformers, electric posts, transmission lines, insulators and electric meters are not exempted from RPT under the Local Government Code.

However, organizations behind the Malinis at Murang Kuryente (MMK) Campaign rallied in front of the ERC office to urge the Commission to reject the proposal of Philreca.

“All property owners pay amilyar (real property taxes) on what they own. Why do we also have to pay for what the coops own?” MMK convenor Gerry Arances pointed out.

“Already, electric consumers are bearing the brunt of many ECs’ violation of system loss caps, mismanagement of financial liabilities, and the costly Power Supply Agreements (PSAs) with dirty energy generation companies. Meanwhile, many ECs are guilty of long and frequent interruptions in their respective franchises and failure to electrify areas within them,” Arances stressed.

The group had filed a motion on behalf of its members and consumers nationwide for the ERC to dismiss the petition.

“In previous years, consumers have always been one with ECs to be recognized as tax-exempt just like any other cooperative, since they are supposed to be people’s enterprises owned by the consumers they serve,” said Dr. Clint Pacana, convenor of the Mindanao Coalition of Power Consumers (MCPC) and president of the Institute for Power Sector Economics (IPSE).

In a press release, Pacana explained that in filing the petition, Philreca abandoned consumer groups that were calling for the exemption of cooperatives from paying for real property tax.

“While the consumers fight it out for their tax exemption, ECs want the easy way of passing on the burden to their supposed owners — the unfortunate consumers. We hope there is no collusion among local officials, ECs, and other distribution utilities for this,” Pacana added.

Electricity/Power Grid

Myanmar to build LNG power stations to meet energy requirements in 2022

25 March 2019

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Myanmar

Myanmar is planning to start three liquefied natural gas (LNG) power projects and a combined cycle power project to meet energy requirements in 2022, said Union Minister Win Khaing of Electricity and Energy.

“The ministry provided electricity to 30 per cent of households recent years and the supply will be up to 50 per cent at the end of 2019. It planned to provide electricity to all by 2030. Annual electricity usage is increased from 15 to 19 per cent year by year and expected to rise till 2030. We are planning to start the projects to meet the energy requirements,” said the union minister.

At present, the ministry is implementing hydropower projects, which generally has less impact on environment, and some are still under construction. Some are still conducting surveys and total electric production is 1,355 megawatts.

Moreover, the ministry is developing a 40-megawatt solar power project in Minbu and electricity generated from the power plant will be connected to national grid soon.

More than 50 per cent of family households in Myanmar will gain access to national grid in coming November, said the minister in the opening ceremony of 225-megawatt natural gas fired power plant in Myingyan held on March 16.

“Myanmar has over ten million households and over four million (about 43 per cent) of them had gained access to power grid in November 2018. The ministry used funds from the union government, regions and states government funds and overseas loans to meet the energy requirement,” said the minister.

The maximum usage of electricity is 3,483 megawatts in Myanmar. It is generating 2,400 megawatts from 28 hydropower plants and 1,083 megawatts from 16 thermal energy power plants including natural gas fired power plants, he said.

Energy Efficiency

HQ of Singapore construction firm being built with sustainable material from local waste

25 March 2019

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Singapore

SINGAPORE – The first step in developing sustainable construction material using local waste was taken today (Mar 25), with the signing of an agreement that will include its use in the building of a new headquarters of a local construction company.

The agreement between JTC Corporation and Samwoh Corporation will see recycled materials processed from construction and industrial waste, like sedimentary rocks excavated from Jurong Rock Caverns, being used in erecting the four-storey building near Kranji Reservoir.

Senior Minister of State for Trade and Industry Chee Hong Tat, who witnessed the signing of the memorandum of understanding (MOU) between JTC and Samwoh, told The Straits Times he is confident Singapore can play a key role in sustainable technology.

The Government will continue to provide opportunities for companies to test-bed new concepts, he said, adding that such eco-friendly projects need to be commercially sustainable as well.

“With the right methods, using recycled materials and adopting eco-friendly measures need not incur higher costs. Samwoh’s commitment to sustainable construction in its very own building is a great example that it can be done,” he added.

Samwoh’s current headquarters, the Samwoh Eco-Green Building, is a testament to sustainability as it is the first building in Southeast Asia that is entirely constructed with recycled concrete aggregates, said its spokesman.

The new HQ, to be called Samwoh Smart Hub, is slated to be completed by 2020.

It will adopt state-of-the-art technologies to bring down its energy consumption. Also, about 30 per cent of its area will be dedicated to greenery that will blend in with Singapore’s 150 km park connector outside its compound and add to the plant life surrounding the reservoir.

It will be the first positive energy industrial building that will produce 20 to 30 per cent more energy than it uses, said Samwoh. The excess energy will be used in an upcoming asphalt plant to be built by the company, a market leader in the production of the sticky, black and viscuous material commonly used in building roads.

The MOU will also allow JTC and Samwoh to explore and collaborate on research and development (R&D) in such areas as digital technologies and automated solutions to improve productivity and maintenance.

As well, they will share resources such as equipment, laboratories and manpower to help defray the high costs of R&D.

To improve productivity, they will work towards developing smart machines and equipment to build higher quality and more reliable roads at lower cost.

SamWoh also noted in a statement that the sedentary rocks being used for the building of its smart hub are prevalent in the geological formation of Singapore and a common byproduct from underground developments.

The collaboration will, among other things, increase the applications and commercial value of these rocks, it added.

Oil & Gas

Enough petroleum supply to meet domestic demand: Ministry

25 March 2019

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Vietnam

HÀ NỘI — The Ministry of Industry and Trade has said domestic petroleum supply is able to meet local consumption demand.

According to a press release issued on March 26, large petroleum trading companies and some departments of industry and trade have reported that companies have provided enough supply for the local market.

Companies have also committed to ensuring petroleum supply for domestic production, business and other consumption activities via their retail system.

In addition, traders must monitor changes to the petroleum supply, the ministry said. In case they have difficulty meeting domestic petroleum demand, they must report the issues to the ministry to find solutions.

The companies said that if the domestic supply could not meet the local demand, they will find reasonable imports to ensure enough supply for the market.

To ensure strict implementation of regulations on petroleum business, the ministry has also asked the General Department of Market Surveillance to strengthen inspection and supervision of petrol and oil trading companies and their retail system. The ministry will strictly handle traders who violate regulations. — VNS

Electricity/Power Grid

Cambodia to buy 200 megawatts from Laos

25 March 2019

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Cambodia ,
Lao PDR

Cambodia will buy 200 megawatts from Laos to feed rising demand for power in the Kingdom.

Electricite du Cambodge has signed an agreement to purchase 200 MW from Laos from 2019 to 2021.

The tariff at which the power will be sold has not been revealed.

With power consumption on the rise, Cambodia needs to increase energy imports, said Ty Norin, secretary of state at Ministry of Mines and Energy.

“The transmission lines to bring energy from Laos are being built as we speak,” Mr Norin said during a press conference on Friday.

The energy purchased by Cambodia will be produced at Laos’ Dan Sahong hydropower dam, located near the border, Mr Norin added.

Earlier this month, the Royal Group of Cambodia and partners China Southern Power Grid and China Huaneng Group said they will continue work on a project to build high voltage transmission lines in the Kingdom.

The project will contribute to the transmission network in the country’s northeast and enable energy exchanges with Vietnam and Laos.

“The project focuses on building transmission lines in the northeast that enable the country to bring in electricity from neighbouring countries when we have a shortage, or to export it when we have a surplus,” Victor Jona, director general of the energy department, told Khmer Times.

A recent report from the Ministry of Mines and Energy shows that the country’s electricity supply will rise by 16.12 percent in 2019, reaching 2,870 MW. 2,428 MW will be generated from local sources, while the rest will be imported from Thailand, Vietnam, and Laos.

Others

Gatchalian pushes for electric vehicle adoption roadmap

24 March 2019

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Philippines

Gatchalian, chair of the Senate committee on energy, recently made the call, as he reiterated the importance of a sound policy and regulatory framework for e-vehicles that would foster the adoption and eventual acceptance of these vehicles in the Philippines.

During a recent Senate energy committee hearing on Senate Bill No. 2137 or the Electric Vehicles and Charging Stations Act, Gatchalian questioned the DOE why the agency has minimally produced policy instruments that would help spur the growth of e-vehicles even though it is promoting its use.

“Moving forward, we want to see research. Of course, this will not be without opposition. There will be opposition, let’s expect that. But we have to clearly explain the advantages of promoting e-vehicles,” Gatchalian said.

“I expect the DOE – which is a much larger organization – should have that data. Hindi naman ho tayo puwede mag-promote nang wala ho tayong basis, (We cannot promote without any basis),” the senator pointed out.

The lawmaker said it is imperative to come up with a comprehensive plan to ensure the promotion of the adoption of electric vehicles and the sustainability of the e-vehicle ecosystem in the long run.

“The advantages of e-vehicles…should be quantifiable, or else, it’s very difficult to convince people that this is actually beneficial,” he told the DOE.

Senate Bill No. 2137 aims to address the challenges to the development of the electric vehicle industry by instructing the DOE to create an electric vehicle roadmap and distribution utilities to incorporate a charging infrastructure development scheme in their “Power Development Plan.”

Gatchalian, who filed the measure, said the bill seeks to solve the entire supply chain of e-vehicles, including one of the most important components—the charging stations.

Under the bill, private and public buildings and establishments would be required to have dedicated parking slots with charging stations. It also mandates open access for the installation of charging stations in gasoline stations.

The measure also seeks to expand non-fiscal incentives—such as exemption from number coding and prioritization in registration—and institutionalizes time-bound fiscal incentives for manufacturers and importers of electric vehicles.

Gatchalian said he believes that the Philippines will become less dependent on oil importations if the transport sector adopts the use of e-vehicles.

“At the same time we would reduce dollar outflows, mitigate greenhouse gas emissions, create more jobs for Filipinos,” he said.

The lawmaker noted that presently, the transport sector was the biggest contributor to the country’s total energy consumption, accounting for more than one-third or 37.2 percent.

Data from the DOE shows that the transport sector is also a major consumer of petroleum products, consisting of 25.72 percent of the total 75,370.50 barrels that were consumed in 2016.

Data provided by the Philippine Statistics Authority (PSA) show that 99.48 percent or 8,039,233 out of 8,081,224 of motor vehicles in the country are run by diesel and gasoline, according to the senator.

Renewables

Govt to Increase Sidrap Wind Power Plant`s Capacity

24 March 2019

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Indonesia

“The power plant in Sidrap would be expanded,” the ministry’s Director of Renewable Energy Harris said in Kupang, East Nusa Tenggara on late Saturday.

“Currently the power plant only has the capacity to produce 75 megawatt (of electricity). It would be increased by 50 to 60 megawatt, so it could produce 125-130 megawatt of electricity,” Harris said.

Sidrap wind power plant is the first wind power project in the country and the largest of its kind in Southeast Asia.

It has 30 windmills each with 80-meter high tower and 57-meter long propellers. Each tower produces 2.5 MW of electricity.

Sidrap wind power plant is the first commercial plant of its kind developed by PT UPC Sidrap Bayu, and it can power up to 150,000 households with 450 KVA of apparent power capacity.

The power plant located in Sidenreng Rappang (Sidrap) District of South Sulawesi is said to become a pioneer for the development of renewable energy in Indonesia.

President Joko Widodo when inaugurated the power plant in July 2018 has expressed hope that the development of Sidrap wind power plant would help the government to reach its target of 23 percent contribution of renewable energy to the country’s electricity production by 2025.

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