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Gaz de France and India's Petronet consortium have reached "a strategic partnership agreement" involving LNG imports into India.

Petronet, to be formed shortly, will be composed of four Indian public-sector companies: Gas Authority of India, Oil & Natural Gas Corp., Indian Oil Corp., and Bharat Petroleum. When India's state utilities are privatized, Petronet will promote LNG imports and develop natural gas utilization projects.

Ensuing LNG projects will be owned 26% by the Indian JV, 26% by the LNG supplier, and 48% by the local government. It is unclear, however, whether GdF will take ownership in the JV end or the supply end of such projects.

T.R. Baalu, India's Minister for Petroleum and Gas, said GdF and Petronet partners have identified four suitable locations in India for LNG import terminals: Ennore, Cochin, Mangalore, and Hazira/Dahej.

SoCalGas and PG&E have launched an Internet service providing online energy shopping and marketing to customers and suppliers alike.

"Energy Marketplace is (the U.S.'s) first Internet-based retail shopping center for natural gas," said the companies. "It is designed to create a competitive environment that can provide substantial yearly savings for customers on their energy costs."

The free service will be available to more than 8 million customers in California. The initial target market is small commercial and industrial customers.

Although natural gas is the only commodity marketed on the service at its inception, it could easily be expanded to accommodate trading of electricity and even telephone and cable television services.

Participants in the new system include UtiliCorp Energy Solutions, Enserch Gas Marketing, Shell/Tejas affiliate Coral Redwood, Cook Inlet Energy Supply, Poco Petroleum, PNM Energy Marketing, and National Gas & Electric.

A report by EIA concludes that, while increased competition in electricity generation could lower average prices well into the next century, the extent of the price reduction depends on natural gas prices.

The reason gas prices play an important role, says EIA, is that "electricity prices based on marginal costs are more sensitive to changes in the operating costs of the marginal generating units than average-cost electricity prices."

Depending on the pace at which gas E&P technology progresses, EIA forecasts competitive electricity prices in 2020 will be 5.1-6¢/kw-hr, adjusted for inflation, compared with about 6.6¢/kw-hr today.

EIA says U.S. "competitive electricity prices would fall below the traditional, regulated average-cost prices through most of theellipseperiod to 2020."

GdF is investigating new forms of underground gas storage that will enable storage facilities to be placed as close as possible to major consuming areas or gas pipelines.

With financial backing from the EU Thermie program, GdF, Norway's Statoil, and Sweden's Sydkraft are working on a pilot project in Skallen, Sweden, involving a "steel-lined artificial cavern." The pilot unit has a volume of 40,000 cu m and will be capable of holding 10 million cu m of gas under pressure.

Testing and trials will extend through 2002. GdF hopes to use it in areas where geological conditions prevent the use of traditional storage methods.

A second GdF study involves storing gas in caverns hollowed out horizontally in salt layers less than 100 m thick. A pilot experiment was run in Alsace last year; a second will occur in the same region in 1998.

Import/export rules are relaxing in some nations to facilitate oil trade.

In a move that would help several power projects to finally take shape, India has laid down detailed guidelines under which independent power producers (IPPs) would be allowed to import fuel naphtha.

The Commerce Ministry says this will end confusion over naphtha import rules. It is because of this confusion that not a single IPP operation using naphtha has started operation.

The Director General of Foreign Trade (DGFT) will issue licenses allowing IPPs to import naphtha directly. Licenses will be issued in consultation with public sector oil companies supplying fuel to the IPPs. DGFT also has amended ex-im policy to permit the power sector to import fuel naphtha.

The foreign exchange crisis has reached such a peak in South Korea that domestic oil importers cannot buy crude without using cash due to the credit downgrade for domestic financial institutions and businesses.

South Korea is pushing for a new rule allowing its oil importers to use domestically available foreign currency to settle oil import fees in order to help solve their cash shortage.

The Ministry of Trade, Industry, and Energy asked the Ministry of Finance and Economy to allow importers to borrow foreign currency. If the rule doesn't pass, shipments are expected to face difficulty this month due to fund shortages.

The trade ministry also plans to ask financial institutions to issue import letters of credit-first for oil importers suffering from a lack of funds.

Beginning late in December, the trade ministry was to defer for 2 months oil import surcharge payments, currently $1.70/bbl. And oil storage requirements will be reduced for the private sector to 30 days' worth of inventory from 33 days.

Meanwhile, South Korea will push for a drastic energy and resources conservation plan, including oil and electricity, to cope with possible shortages. The energy-saving plan is the country's first since the late 1970s.

Canada's National Energy Board has established a new fair-market access procedure for licensing long-term oil exports. The change requires exporters to give interested Canadian refiners and marketers access to the crude. Ottawa asked NEB earlier this year to develop a market-based procedure for reviewing crude export license applications.

Companies seeking export approvals will be required to inform potential Canadian buyers of the volumes and types of crude involved. If a Canadian buyer is interested in all or part of the volumes, the exporter must negotiate with that company on the same basis as it did with its export customer.

Exporters are not required to provide price information, and a potential Canadian buyer has 30 days to make a decision.

In the wake of the Kyoto meeting on climate change, Canada's Natural Resources Minister Ralph Goodale says talks on cutting greenhouse gas emissions must extend beyond government to include consumers.

Goodale made the comment in Calgary after meetings with oil industry representatives in which they expressed concerns over Canada's commitment at Kyoto to a 6% cut in greenhouse gases. He noted that the industry was blunt and direct in its assessment of Kyoto. David Manning, president of the Canadian Association of Petroleum Producers (CAPP), agreed, saying group members were blunt in their concerns over Ottawa's lack of analysis on economic effects of the Kyoto commitment. CAPP says the emission cuts would cost oil industry and related-industry jobs.

Goodale says statistics show that most emissions flow from consumption of energy, not its production. He said Canada will carefully monitor the U.S. position on Kyoto so that it does not place itself at a competitive disadvantage with the U.S. Goodale said a consultation process to get an implementation plan for Kyoto commitments could take 2-21/2 years.

The minister repeated pledges by Ottawa that Canada will implement no carbon tax and that no province, region, or sector will be asked to bear undue burden in implementing the Kyoto accord. Canada agreed at Kyoto to reduce greenhouse gas emissions by 6% from 1990 levels by 2008-12. It is already 13% above emission level targets agreed to at an earlier international conference. Industry officials say the 6% cut agreed to at Kyoto is, in fact, closer to 20%.

U.S. EPA has issued a legal framework to prod an agreement between 12 northeastern states and the auto industry on development of a so-called 49-state car (required in all states but California).

The states are seeking tailpipe emission limits as tough as those in California, while automakers propose developing a car that pollutes less but would not be as clean-burning as the model required in California.

The EPA framework would make any voluntary agreement enforceable if the northeastern states and automakers can strike a deal in 60 days.

The crash of TWA Flight 800 off Long Island in July 1996 may eventually affect U.S. refiners. The U.S. Federal Aviation Administration suggested to a National Transportation Safety Board hearing that one solution may be for commercial airlines to use JP-5, developed for military use, rather than Jet A. FAA said JP-5 has a flash point of about 150° F. vs. about 110° F. for Jet A. U.S. refiners produce about 12.7 billion gal/year of Jet A. Refiners and distributors have long dealt with the problem of potential ignition during pumping with simple grounding technology and use of specialized materials (OGJ, Mar. 3, 1997, p. 73).

Copyright 1997 Oil & Gas Journal. All Rights Reserved.