New base 11 january 2018 energy news issue 1126 by khaled al awadi

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NewBase Energy News 11 January 2018 - Issue No. 1126 Senior Editor Eng. Khaled Al Awadi

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE

UAE: Adnoc awards contracts to develop a mega gas project Gulf News + NewBase

A mega offshore gas project in the northwest of Abu Dhabi could meet 20 per cent of the UAE’s gas demand by the second half of the next decade, Abu Dhabi National Oil Company (Adnoc) said on Tuesday as it awarded two Front End Engineering Design (FEED) contracts to develop Hail, Ghasha and Dalma fields to companies from the UK and the UAE.

Bechtel was awarded Hail and Ghasha contract, whereas TechnipFMC was awarded Dalma FEED contract, according to a statement from Adnoc. Adnoc is harnessing its gas resources as part of its vision 2030 growth strategy keeping in mind the energy demand in the UAE.

“This FEED award provides Adnoc with the potential to unlock additional undeveloped sour gas reserves and will allow us to deliver against our strategic objective to ensure a sustainable and economic supply of gas,” said Dr Sultan Ahmad Al Jaber, UAE Minister of State and Group CEO of Adnoc.

The Hail, Ghasha and Dalma project taps into Abu Dhabi’s Arab formation, which is estimated to hold multiple trillions of cubic feet of recoverable gas and from which the project is expected to produce more than one billion cubic feet of gas per day (cfd), enough gas to provide electricity to two million homes.




Oman signs deal for oil and gas exploration AFP + NewBase

Oman has signed a deal for oil and gas exploration with a Lebanese company, one month after Lebanon approved its first offshore energy exploration, state media said Wednesday.

Beirut-based Petroleb would drill exploratory wells to assess oil reserves in the Al-Afif concession area of southern Oman, inland from the Yemeni and Saudi Arabian borders, said the official ONA news agency.

Oman aims to "increase oil reserves and raise production rates in the sultanate" and discover new fields, the oil and gas ministry's director of planning and research Saleh bin Ali Anbouri said in a statement carried by ONA.

Like other energy-rich Gulf states, Oman was hit hard by the slump in oil prices since mid-2014 and joined an agreement by oil producers to cut output in a bid to shore up prices.

Revenues are up three percent from last year at an estimated at $24.7 billion.

Spending, however, is projected at $32.5 billion, seven percent higher than last year, according to the finance ministry.

The deal with Petroleb is small by regional standards, with an estimated investment value of $20 million for Oman in the first three-year phase and between $20 and $40 million in the second phase.

Lebanon last month approved a bid for offshore oil and gas

exploration off its own Mediterranean coast - a vision for years hampered by political instability and domestic wrangling.

That deal was awarded to the only bidder, an international consortium including France's Total and Russia's Novatek.




Iraq: Shell sells stake in West Qurna 1 oil field to Japan's Itochu Source: Reuters

Iraq has approved the sale by Royal Dutch Shellof the company’s 20 percent stake in Iraq’s West Qurna 1 oil field to Japan’s Itochu Corp, a senior Iraqi oil official said on Wednesday.

The deal comes as the Anglo-Dutch company agreed to exit the Majnoon oil venture, one of the largest fields in OPEC member Iraq, and hand over its operation to the state-run Basra Oil Co. (BOC) by the end of June 2018.

'Shell sold its stake in West Qurna 1 to Itochu and the oil ministry approved it. We met with Itochu and discussed the required financial investments and operations at the field,' Ihsan Abdul Jabbar, the head of state-run BOC, told Reuters in an interview.

The West Qurna 1 oilfield, operated by Exxon Mobil, currently produces around 405,000 barrels per day.

Shell and Itochu were not immediately available for comment.

Abdul Jabbar also said BOC had reached an agreement with KBR Inc, a U.S. engineering and construction firm, to help manage projects to develop

production capacity at the Majnoon field.

Iraq is still in talks with another foreign engineering firm to operate the energy facilities at Majnoon and a deal is expected before June, said Abdul Jabbar, without naming the company.

'We are targeting to cut the cost of the projects’ development by 30 percent this year,' said Abdul Jabbar, adding the development cost for Majnoon set by Shell in 2017 was $1 billion.

Shell has said it is still committed to producing gas in Iraq, focusing on developing and expanding the Basra Gas Company, which processes gas from the Rumaila, West Qurna 1 and Zubair fields. It has a 44 percent stake in the joint venture.

Shell is now is giving advice to the Majnoon managing teams on the tendering process and how to maintain normal operations at the field, said Abdul Jabbar.

He said the associated gas extracted from Majnoon stood at around 130 million cubic feet per day (mcf/d) and only 70 mcf/d was processed and utilized, with the rest flared.




Singapore uncovers large oil heist at Shell's biggest refinery Reuters - John Geddie, Henning Gloystein

Eleven men were charged in a Singapore court on Tuesday in connection with a large-scale oil theft at Shell’s biggest refinery, while police said they were investigating six other men arrested in a weekend raid.

Police in the island-state said on Tuesday they had detained 17 men, whose ages ranged from 30 to 63, and seized millions of dollars in cash and a small tanker during their investigations into theft at the Pulau Bukom industrial site, which sits just south of Singapore’s main island.

Oil refining and shipping have contributed significantly to Singapore’s rising wealth during the past decades. But the case underlines the challenges the industry faces in a region that has become a hotspot for illegal oil trading.

The investigation began after Shell contacted the authorities in August 2017, police said in a news release. After “extensive investigations and probes,” the Criminal Investigation Department, Police Intelligence Department and Police Coast Guard launched a series of simultaneous raids across Singapore, which led to the arrests.

Nine Singaporeans were immediately charged in the theft, of which eight were employees of the Singapore subsidiary of Royal Dutch Shell Plc, court documents showed. Two Vietnamese nationals were charged with receiving stolen goods on a small tanker named Prime South (IMO: 9452804), the documents showed.

Shell confirmed on Tuesday that eight of the 11 men charged were current or former employees at Shell Eastern Petroleum (Pte) Ltd.

Shipping data from Thomson Reuters Eikon showed the Prime South had been shipping fuel between Ho Chi Minh City, Vietnam, and Singapore for the past 30 days.




GRANDER SCHEME?

Tuesday’s cases could be just the first insight into a grander scheme.

The charges seen so far allege three incidents of gasoil theft: on Nov. 21, 2017, of more than 2,322 tonnes valued at S$1.277 million ($958,564.78); and on Jan. 5 and 7 this year of a combined 2,062 tonnes of gasoil, valued at S$1.126 million.

The Vietnamese nationals were charged with receiving gasoil in the early evening hours of Jan. 7, at wharf 5 at the heart of Shell’s operations on Bukom island, the documents show.

Meanwhile, police say the other six men arrested remain under investigation.

During raids on Sunday, police said they seized S$3.05 million in cash and the 12,000-deadweight-tonne tanker. They have also frozen suspects’ bank accounts.

Shell said on Tuesday it anticipated “a short delay” in its supply operations at Bukom, its largest wholly owned refinery in the world in terms of crude distillation capacity. It declined to say the total amount of oil stolen.

It is the second high-profile case of wrongdoing at companies in Singapore to hit headlines in recent weeks, after Keppel Corporation Ltd’s rig-building business agreed in December to pay more than $422 million to resolve charges it bribed Brazilian officials.

FILE PHOTO: Storm clouds gather over Shell's Pulau Bukom oil refinery in Singapore January 30, 2016. REUTERS/Edgar Su/File Photo

OIL TRADING HUB

Singapore is one of the world’s most important oil trading hubs, with much of the Middle East’s crude oil passing through Singapore before being delivered to the huge consumers in China, Japan and South Korea.




Singapore is also Southeast Asia’s main refinery hub and the world’s biggest marine refueling stop.

Shell is one of the biggest and longest established foreign investors in Singapore. Its oil refinery on Bukom island can process 500,000 barrels per day.

Illicit oil trading is widespread in Southeast Asia. In some cases, oil has been illegally siphoned from storage tanks, but there have also been thefts at sea, including whole ships being seized for the oil cargo.

The Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) says that siphoning of fuel and oil at sea in Asia, including through armed robbery and piracy, saw sharp increases between 2011 and 2015.

There has been a modest decline since then, although the organization said in a quarterly report that oil theft was still “of concern,” especially in the South China Sea, off the east coast of Malaysia. The stolen fuel is generally sold across Southeast Asia, offloaded directly into trucks or tanks at small harbors away from oil terminals.




U.S:Nearly half of utility-scale capacity installed in 2017 renewables Source: U.S. Energy Information Administration, Form EIA-860M, Preliminary Monthly Electric Generator Inventory

Once final data are in, EIA expects about 25 gigawatts (GW) of new utility-scale electric generating capacity to have been added to the power grid during 2017, nearly half of which use renewable technologies, especially wind and solar. Another 3.5 GW of small-scale solar net capacity additions are estimated to have come online in 2017.

Of the renewable capacity additions in 2017, more than half came online during the fourth quarter. Renewable capacity additions are often highest in the final months of the year, in part because of timing qualifications for federal, state, or local tax incentives. Estimated fourth-quarter capacity additions for 2017 are based on planned additions reported to EIA and are subject to change based on actual project completions.

Monthly U.S. renewable electricity generation peaked in March at 67.5 billion kilowatthours, or 21% of total utility-scale electricity generation. In late spring, the melting snowpack from a winter characterized by higher-than-average levels of precipitation increased hydroelectric generation, while strong wind resources in March also produced a peak in monthly wind generation for the year.

Most renewable generation in 2017 came from the Western census division, which accounted for the majority of the hydroelectric (67%) and solar (69%) generation. Wind generation was more evenly spread across the country in 2017, with 37% occurring in the Midwest, 37% in the South, 21% in the West, and the remaining 4% in the Northeast.




Source: U.S. Energy Information Administration, Electric Power Monthly

Other renewable electricity highlights in 2017

• In February, Maryland increased the renewables generation target in its renewable portfolio standard (RPS) to 25% of retail electricity sales by 2020, replacing the earlier target of 20% by 2022.

• For the first time, monthly electricity generation from wind and solar (including utility-scale plants and small-scale systems) exceeded 10% of total electricity generation in the United States in March.

• In early spring, California’s total solar share of gross electricity demand exceeded 50% during the mid-day hours, resulting in negative pricing.

• From March through May, U.S. monthly electricity generation from utility-scale renewable sources exceeded nuclear generation for the first time since July 1984.

• On August 21, a solar eclipse obscured the sunlight needed to generate electricity at approximately 1,900 utility-scale solar photovoltaic (PV) power plants in the United States. Solar power output in the California Independent System Operator (CAISO) region fell to a low of 3.6 GW during maximum obscuration, about 60% lower than normal.




NewBase January 11 - 2018 Khaled Al Awadi

NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE

Oil dips away from 3-year highs on signs of overheated market Reuters + Bloomberg + NewBase

Oil inched away from three-year highs on Thursday on signs that a 13-percent rally since early December may have run its course, although a surprise drop in U.S. production and lower crude inventories offered prices some support.

U.S. West Texas Intermediate (WTI) crude futures were at $63.50 a barrel at 0529 GMT, 7 cents below their last settlement, but still close to a December-2014 high of $63.67 per barrel reached the previous day.

Brent crude futures were at $69.10 a barrel, 10 cents below their last finish, albeit also still close to the previous day's peak of $69.37 a barrel - the highest level since an intra-day spike in May 2015.

Oil price special

coverage




"In Q1, the balance of risk to Brent lies to the downside, with prices overheating, record net-length built into the futures market and fundamentals set to weaken seasonally," BMI Research said in a note.

The mounting downward pressure on prices is also showing in the physical oil market, where OPEC's No.2 and No.3 producers, Iran and Iraq, this week cut their supply prices to remain competitive with customers.

Oil markets have so far been generally supported by a production cut led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia that started in January last year and is set to last through 2018.

More immediate price support came overnight from the United States, where crude inventories fell almost 5 million barrels in the week to Jan. 5, to 419.5 million barrels.

That's slightly below the five-year average of just over 420 million barrels.

U.S. production fell 290,000 barrels per day to 9.5 million bpd, the EIA said, foiling expectations of U.S. output breaking through 10 million bpd.

Ample fuel

Despite this, more bearish signals are appearing. Fuel inventories in Asia and the United States remain ample, and in some cases are rising.

U.S. gasoline stocks rose 4.1 million barrels, EIA data showed, more than expected.

In Asia's oil trading hub Singapore, average refinery profit margins have fallen below $6 per barrel this month, their lowest seasonal level in five years, resulting in lower feedstock crude orders.

With the crude price up by more than 13 percent since early December, some analysts expect a downward price correction following the recent bull-run.

"Markets are getting a bit fatigued, and a healthy correction could be on the cards," said Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore

Citigroup says conflict and shocks could lead to $80 oil

OPEC disruptions led by Iran, Iraq and U.S. military actions over North Korea underpin potential spike

Geopolitical risks may cause oil to reach $80 according to Citigroup. Carlos Jasso / Reuters

This year may be anything but staid for the oil market as Citigroup Inc. predicts wildcards including war, Middle East tensions, Donald Trump and Kim Jong Un driving crude toward $80 a barrel.

After prices were boosted by Opec’s output curbs in 2017, the U.S. President has shifted the focus to geopolitical risks, with his pursuit of sanctions on Iran and North Korea potentially having significant consequences, the bank said. That’s in addition to political disturbances in some Opec members like Iraq and Libya that could see crude supplies decline, boosting oil to levels between $70-$80, it said in a Jan. 9 report.

“Many of these uncertainties have significant consequences for commodities,” Citigroup analysts including Ed Morse wrote in the report titled Wildcards for 2018: Trump looms large along with systemic risks. “It is not a surprise that our list of potential wildcard events in the year ahead retains a focus on the United States.”




The decision by the Organization of the Petroleum Exporting Countries and its allies including Russia to curb production and drain a global glut helped oil rally for a second year in 2017. From a market-fundamentals perspective, investors are now watching to see whether the U.S. continues to expand its output, a threat which has rocked the oil industry in the past few years.

However, the most wide-ranging systemic risk to commodities this year could be President Trump disturbing the political world order, Citigroup said. Brent crude, the benchmark for half of the world’s oil, traded at an average price of $54.75 a barrel last year. Front-month futures were at $69.05 while U.S. benchmark West Texas Intermediate crude traded at $63.38 as of 10:09 a.m. London time on Wednesday.

Re-imposing of U.S. sanctions on Iran, the third-biggest OPEC producer, is likely to dislocate at least 500,000 barrels of the Middle Eastern nation’s oil exports, resulting in a $5 price increase to oil, the bank said. Hard liners in the Islamic Republic may also seek to break a nuclear agreement with global powers including the U.S., while Congress may consider new sanctions against the Mideast producer, Citigroup said.

The rhetoric from and toward North Korea has also escalated in the past few months, carrying the “non-negligible risk” of turning into a military conflict, according to Citigroup. Stockpiling of strategic goods such as crude may accelerate with the risk of war.

The disturbance in Iran, as well as supply disruptions in Iraq, Libya, Nigeria and Venezuela could see global oil supply drop by more than 3 million barrels a day this year, Citigroup said. Over-tightening of environmental regulations in China, overshooting or underperforming shale production in the U.S., as well as a major escalation in trade frictions between Trump’s administration and China are other risks to oil, the bank said.

Oil hit highs not seen in more than three years as U.S. stockpiles fell for an eighth week in a row. At the same time global demand for oil is near its highest since the U.S. financial crisis. Investor bullishness is now at a record for Brent but analysts lack a consensus on a future price. Bloomberg's Ramy Inocencio explains with his three Bloomberg terminal charts you need to know on "Bloomberg: Daybreak Asia." (Source: Bloomberg)







Crude Oil Prices Are Up 49%, and It’s Not All Thanks to OPEC Bloomberg - Joe Carroll

OPEC may get the credit for the longest winter decline in U.S. crude stockpiles in a decade, but other factors are also at play, including strong refining margins, frigid weather and robust foreign demand.

The bottom line: A 49 percent surge in benchmark North American crude futures since late June, putting prices at a three-year high.

An array of international events in the Middle East and elsewhere contributed to the price rise as the year rolled to an end, helping form a "perfect confluence of events" supporting 2017 demand. Will it last? Analysts are divided. Some see prices rising to $80 a barrel, citing ongoing geopolitical risks. Others, predicting rising growth from America’s fertile shale fields, aren’t so sure.

"We expect inventories are going to build this year -- slightly,” said Michael Cohen, Barclays Head of Oil Markets Research, in an interview on Bloomberg TV. "You’re going to see a bunch of new crude supply coming on to the market this year from the U.S. So all in all, on a balanced basis, we don’t see the kind of shortage to bring us to $80 for a sustainable basis."

Here’s the breakdown on U.S. stockpiles, followed by four charts outlining key contributors to rising prices:

A year ago, some analysts were predicting the Organization of the Petroleum Exporting Countries and its allies wouldn’t be disciplined enough to harness production. The cartel and partners such as Russia have largely kept their pledge, helped by supply disruptions in Libya and Venezuela.

In November, the group agreed to keep the cuts in place for all of 2018 and beefed up the agreement by including Nigeria and Libya. Here’s a breakdown:




Long-term demand for crude may be threatened by the electric car revolution and governments’ attempts to control climate change, but it’s likely to happen slowly. Exxon Mobil Corp. expects just 6 percent of the global vehicle fleet to be electric by 2040, given robust demand for traditional combustion engines in emerging markets.

On Tuesday, the World Bank lifted its 2018 global economic-growth forecast to 3.1 percent, which, if achieved, will consume a lot of petroleum:




Overseas demand for American oil has blossomed, exceeding 1 million barrels a day almost every week since late September, when ports and terminals along the Texas coast finally recovered from Hurricane Harvey. Many foreign refiners will pay a premium for crude from U.S. shale fields because of its easy-to-handle properties and the high proportion of valuable fuels it tends to yield.

“Most thought that coming into 2018, the commodities trade in general was one that would be successful,” Rob Thummel, managing director at Tortoise Capital Advisors LLC, which handles $16 billion in energy-related assets, said by telephone. “Given the momentum that’s been building for commodities in general and oil in particular, in an economy both domestically and globally that’s got a lot of momentum behind it, oil is benefiting from that.”

The result: Hedge funds raised bets on rising Brent crude to a record, according to the latest ICE Futures Europe data. At the same time, bullish wagers on West Texas Intermediate, the U.S. benchmark, remain near the highest levels in almost a year, U.S. Commodity Futures Trading Commission data shows.




NewBase Special Coverage

News Agencies News Release January 11-2018

It's a Record Year for Natural Gas. Yay? By Liam Denning

The Energy Information Administration's latest short-term outlook, published on Tuesday, had an eye-catching prediction: U.S. oil output in 2018 would hit its highest level ever.

But this column isn't about that.

Instead, let's look at another record being broken: U.S. natural gas production.

Blowing Up

America's gas production is forecast to set new records this year and next

Source: Energy Information Administration

Note: Data for 2018 and 2019 are projections

That 68 percent increase since 2005 is pretty remarkable on its own. What isn't clear from that chart is just how big a year 2018 is expected to be. Here's the same data, but showing the change each year:




Leap Year

This year isn't just expected to see the highest U.S. natural gas output ever, but also the biggest jump in production by far


Note: Data for 2018 and 2019 are projections.

That extra 6.9 billion cubic feet of gas production expected in 2018 is like the U.S. adding the entire output of Turkmenistan -- one of the world's largest gas exporters -- in the space of just one year.

Two big reasons for this are logistics and oil. Pipelines able to carry roughly 7 billion cubic feet of gas a day away from the prolific Appalachian region are due to start up this year, allowing production that's been bottled up in the East to flood out. Meanwhile, rising oil production in the Permian shale basin and elsewhere will bring increased quantities of associated gas.

I wrote last week about how gas prices were strangely subdueddespite the bitter cold gripping large parts of the U.S. These projections are a big reason. It is notable that the EIA's numbers incorporate estimates for lower gas prices this year and next compared to 2017. The cost structure of U.S. gas production has changed fundamentally.

The structure of supply and demand has also changed fundamentally, and in tandem. In the first decade of this century, the U.S. was short of about 9 billion cubic feet a day of gas, on average,




relative to its consumption. Imports made up the difference. The latest projection from the EIA shows that this has almost entirely flipped:

The Upside Down

The structure of the U.S. gas market is set to flip on its head in 2018


Note: Excludes inventory changes and balancing factors. Data for 2018 and 2019 are projections.

Growing exports of gas, via pipelines to Mexico and, increasingly, shipped as a liquid on tankers, are the one bright spot in the market today.

Just as new pipelines spreading out from the eastern U.S. will allow Appalachian producers to tap into higher prices, so foreign markets will provide a relatively small, but vital and growing, outlet for the country's excess supply overall. Similarly, U.S. oil producers got some relief when restrictions on crude exports were lifted in late 2015.

It won't be enough to lift the market any time soon, and producers in regions prone to bottlenecks -- such as in the Permian basin and in Alberta -- could be in for some severe discounts.

On the other hand, that's good news for anyone in the somewhat battered business of building and operating pipelines to ease those bottlenecks and move all those molecules, such as The Williams Cos. Inc. or Targa Resources Corp.

For now, the export valve operates as more of a floor than an elevator when it comes to gas. In theory, linking higher global gas prices more directly to the U.S. market should lift domestic prices eventually.

Equally, though, bear in mind that once you get above $5.50 per million BTU for U.S. gas, margins on cargoes shipped to almost anywhere but competitive Asian markets start to look pretty thin.

Of course, many U.S. gas producers would pledge their soul to get $5.50 for their gas these days. The problem is, with the number of rigs drilling for gas now less than half where it was five years




ago -- and roughly a tenth where it was a decade ago -- those same producers would crank up drilling long before that happened.

More With Less

The number of rigs focused on drilling for gas has collapsed alongside prices as supply of the fuel has soared

Source: Bloomberg




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Khaled Malallah Al Awadi, Energy Consultant MS & BS Mechanical Engineering (HON), USA Emarat member since 1990

ASME member since 1995 Hawk Energy member 2010

Mobile: +97150-4822502 [email protected] [email protected]

Khaled Al Awadi is a UAE National with a total of 28 years of experience in the Oil & Gas sector. Currently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years, he has developed great experiences in the designing & constructing of gas pipelines, gas metering &

regulating stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas transportation, operation & maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcasted internationally, via GCC leading satellite Channels.

NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE

NewBase January 2018 K. Al Awadi




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New base 11 january 2018 energy news issue 1126 by khaled al awadi