Page 148 - CW E-Magazine (2-4-2024)

Hydrocarbons

OPPORTUNE TIME
LNG importers rush to buy spot cargoes as prices

fall on weak demand

Power companies and refi neries are During the same period last year, Total gas demand for the city gas dis-
doubling down on spot liquefi ed natural spot LNG prices averaged $18.75-per tribution sector, however, continues to
gas (LNG) as prices have hit a three- mmBtu. In 2022, spot LNG prices be fl at with a reduction in administered
year low, according to a report in the touched a record $70-per mmBtu on pricing mechanism (APM) gas alloca-
Economic Times. the back of the Russia-Ukraine war. tion offset by higher LNG consump-
tion. APM gas is sourced from domes-
LNG importers like Gail, Gujarat LNG is mostly traded through long- tic gas fi elds of oil and gas exploration
State Petroleum Corporation (GSPC), term contracts of 20-25 years and in companies and its price is determined
Torrent Gas, Bharat Petroleum Cor- the spot market. The price of spot LNG by the Petroleum Planning & Analysis
poration Ltd. (BPCL) and Indian Oil is higher than long-term LNG. Cell (PPAC), a unit of the oil ministry.
Corporation (IOC), among others, are
said to be buying spot cargoes as the India’s LNG demand in January Internationally, the US Henry Hub
Asia spot LNG price has declined bet- 2024 continued to rise strongly to 95- gas price declined to $1.9 per mmBtu
ween $8.3 and $9-per million British million cubic metres per day (mmcmd) due to weak domestic demand on the
thermal units (mmBtu) due to weak from 90-mmcmd in December 2023 back of a mild winter, leading to high
demand and high inventory in both due to the moderation in spot LNG inventories and a temporary pause in
Asia and Europe, giving these com- prices to $10-16 per mmBtu from $16- approval of new LNG export plants to
panies room to expand sourcing and 17 per mmBtu in November. This was consider the environmental and eco-
sales to the power, fertiliser, refi ning driven by higher demand in the power, nomic impacts of such facilities, JM
and other sectors. fertiliser and other industrial segments. Financial said in a March 6 report.

EXPLORATION
ONGC to explore for oil and gas in Bihar

Oil and Natural Gas Corp.(ONGC) will help guide the company’s plans cult to acquire as over the years, the
is planning to drill a well in Bihar this for the rest of the exploration block, number of owners (for a land parcel)
year to look for oil and gas. A com- including the planned drilling of the increases and convincing each and
mercial discovery will not just put the second well. every owner is diffi cult,” she said.
state on India’s oil map, but also open
up for exploration the entire Ganga Exploratory drilling was last under- Both blocks in Samastipur and
basin stretching from Bihar to Uttar taken in Bihar about half a century Ballia were obtained in the fourth
Pradesh and Punjab. ago. Since then, a lot of seismic data Open Acreage Licensing Policy
have emerged and drilling of wells (OALP) round a few years ago.
According to Ms. Sushma Rawat, can help calibrate that. “This one
Director (Exploration) at ONGC, the well will open up the entire basin for ONGC and other explorers have
company has acquired 3D seismic future exploration, of which we are to directly deal with land owners to
data for 300-sq.km. for its block in very hopeful,” said Ms. Rawat. acquire land. Explorers get licence
Samastipur, Bihar, and is now plan- to explore an oil and gas block for
ning to drill two exploratory wells. ONGC also plans to drill an explo- a limited time. They have to under-
The fi rst drilling will be done this ratory well in another block in the take seismic surveys, obtain multiple
year and may cost Rs. 30-35 crore, Ganga basin in Ballia, Uttar Pradesh, clearances from several authorities,
she said. but has been facing hurdles in acquir- and drill wells in the given time to
ing land. “We don’t require a very know if the area has commercially
Data from the fi rst well’s drilling big patch (for the well), but still diffi - exploitable resources.

148 Chemical Weekly April 2, 2024

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