New base 15 january 2018 energy news issue 1128 by khaled al awadi

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NewBase Energy News 15 January 2018 - Issue No. 1128 Senior Editor Eng. Khaled Al Awadi

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UAE: Masdar eyes fresh investment opportunities abroad including in Latin America

The National - Jennifer Gnana

Abu Dhabi clean energy firm Masdar is eyeing fresh investment opportunities outside the UAE and is considering entry into Latin America to help expand its operations globally, its chief executive Mohamed Al Ramahi said.

Masdar, which is owned by Abu Dhabi strategic firm Mubadala Investment Company, manages a diverse portfolio of renewable energy assets and is looking to invest a further Dh4 billion over the next few years in energy projects globally, the chief executive said last year.

A recent swathe of economic initiatives in Saudi Arabia, particularly around renewable energy and its planned mega-

city Neom, could present opportunities. “Neom is a great initiative, it is very similar to Masdar City in terms of concept but at a much larger scale,” Mr Al Ramahi said.

Masdar City, the company’s flagship development in Abu Dhabi, is a carbon-neutral project that is home to about 530 companies, including international energy services firms such as Siemens and Schneider Electric, the Emirates Nuclear Energy Corporation and the headquarters for the International Renewable Energy Agency.

The development has a 98 per cent occupancy rate, with all of its units fully leased, said Mr Al Ramahi.




The Saudi government in October launched Neom, an ambitious development project for a new city spanning 26,500 square kilometres and costing about $500bn, which will be sourced from the kingdom’s Public Investment Fund as well as international investors.

The project, located in the country’s north-west, will be developed on an area of land that stretches into neighbouring Egypt and Jordan. It is scheduled to be completed by 2025. The National reported that Siemens, Europe’s largest industrial manufacturing firm, has expressed interest in Neom.

Masdar is benefiting from increasing investments in renewable energy globally and particularly in the Mena region, where falling prices of wind and solar and government plans to reduce dependence on fossil fuels for power production are driving growth.

The share of renewables in the Middle East power mix is forecast to rise to 20.6 per cent or 100 gigawatts by 2035 from 5.6 per cent or 16.7 GW in 2016, according to the Middle East Power Outlook 2035 report released by Siemens on Sunday.

Masdar is also looking away from the region into opportunities in Latin America, in markets including Argentina and Colombia, he said. “Latin America is a big market for wind and solar. We will be signing some agreements of some sort,” he said, declining to give details about specific investments or the timing of such agreements.

The company is also looking to make inroads in the growing shift towards renewables in China and India. “We would like to also invest in both countries China and India, just to be specific, but also South East Asia.

“In Indonesia, we have started our development programme there,” said Mr Al Ramahi, referring to Masdar’s plans to deploy a floating 200MW solar photovoltaic project in the heart of Indonesia’s jungles. Masdar, which has built a wind portfolio that includes 1 GW of offshore wind capacity across the UK, Jordan and the Seychelles, is now eyeing the burgeoning Egyptian wind sector.

The firm is looking at a collaboration between local Egyptian companies and Japan’s Marubeni to develop about 800MW of wind projects across the North African state. “Basically we will put our portfolio together and develop bigger projects in Egypt,” said Mr Al Ramahi.

Masdar’s chief executive shrugged off plans for privatisation but said the renewable energy developer will be looking at packaging some of its portfolio assets in the form of a real estate investment trust (Reit).

“We have nice sizeable real estate green assets that are generating healthy returns. Potentially the idea is to go out there to do a private placement and later on we can do a Reit, but not now,” he said.

Separately, Masdar said yesterday it has purchased a 49 per cent stake in Montenegro’s first wind energy project, a 72MW onshore wind farm operated by Krnovo Green Energy, a subsidiary of Akuo Energy, a French renewables independent power producer.

The project has been onstream since November and is Masdar’s second wind farm in western Balkans, after a 158MW project in Serbia, which reached financial closure in October.The company also said yesterday that it had completed the installation of 290-watt solar panels in more than 1,000 villages living off-grid in Morocco.

The scheme, which Masdar developed in partnership with Morocco’s Office National de l’Electricité et de l’Eau Potable (Onee) provides energy access to 19,438 homes in the North African state. Masdar secured an engineering, procurement and construction contract to maintain the solar home systems for two years, after which Onee will manage the systems for an additional eight years




Iraq to reach 'zero gas flaring' by 2021, says oil minister The National –( images by NewBase)_

Iraq plans to snuff out gas flared from its southern oil-producing fields by 2021 as it looks to free up some of the fuel for export, its oil minister said on Saturday.

“By the middle of this year, we’re heading definitely to conclude three giant contracts with international gas companies to utilise the gas in all southern areas [to the tune of] 950 million scf [standard cubic feet] covering Basra, Nassriya and Missan. By implementing this, by end of 2021, Iraq willl reach zero flaring definitely,” Jabbar Al Luaibi said at an energy conference in Abu Dhabi.

The World Bank estimates around 16 billion cubic metres of gas from Iraqi fields was flared in 2015, costing the economy billions in lost revenue. Power outages in the war-torn country, particularly in the summer when temperatures often reach 50°C, have led to protests against the government.

The National reported in November that Iraq had added around 400 megawatts to its power grid from the first wave of flared gas recovery last year.

Iraq will have a surplus of around “4,000 million cubic feet to be freed up for exports”, when oil production touches seven million barrels per day (bpd) “over the next few years", said Mr Al Luaibi.

The BP Statistical Review of World Energy estimates Iraq to have proven have proven gas reserves of around 130 trillion cubic feet, much of it associated with oil production. However, the Opec producer has seen development of its gas industry crippled due to a lack of infrastructure as a result of years of war and sanctions.

Iraq, which insists it will remain compliant with Opec output curbs to prop up the price of oil, said its output had inched close to five million barrels per day (bpd).

Opec's latest monthly oil market report said the Middle East's third-largest producer registered an output of 4.360 million bpd, according to its official sources and 4.396 million bpd according to secondary sources.

Iraq has also improved export capabilities from the south of the country to offset any disruption to crude exports from Iraqi Kurdistan, said Mr Al Luaibi. Political instability from the fallout over the Kurdish referendum in October more than halved oil flow from the 600,000 bpd Ceyhan pipeline, and spurred the price of Brent to around $64 per barrel.

"Our export capabilities increased in the south of the country to 4.6 million bpd," said Mr Al Luaibi.

"That will offset the stopping of export from the north, we did a lot of work with the gas utilisation as a priority," he added.




The Iraqi oil ministry has yet to find stakeholders to replace Anglo-Dutch oil major Shell to undertake development at Majnoon, one of its largest oilfields, he added. The National has reported that Petronas, which also held an operating stake in the field, had decided to quit the project by June this year.

Shell Event – Gas to Power in Iraq

Flares Down and Gas to Power in Iraq Shell is playing a pivotal role in developing Iraq’s gas master plan in partnership with the Ministry of Oil, an affiliation that dates back to 2005.A decade on Shell has established a broad portfolio of assets which are helping to build a processing infrastructure vital to unlocking Iraq’s potential to become a world leading gas producer and in parallel reduce flaring.

As one of the largest investors in the country’s energy industry Shell is significantly involved in the Basrah Gas Company (BGC) Joint Venture with a 44% stake alongside majority shareholder the South Gas Company (51%) and Mitsubishi Corporation (5%).

The unique midstream company captures, treats and monetizes associated natural gas that is currently being flared from West Qurna 1, Zubair and Rumaila oil fields. Since the start of operations in May 2013, gas processing capacity volumes have doubled, and in March 2015, a record of 515 mmscf of natural gas per day was produced, along with a record 3075 tons of LPG –volumes not seen for more than a decade.




Japan Oil Seller Turns to the Enemy as Electric Cars Dent Petrol Profits Bloomberg - Tsuyoshi Inajima

As the tussle between electric vehicles and the oil industry intensifies, Japan’s biggest refiner is considering a novel approach: Co-opt the enemy’s product.

JXTG Nippon Oil & Energy Corp. is looking to start an EV car-sharing service at gas stations to help offset the expected decline in oil revenues, said Tsutomu Sugimori, president of Japan’s biggest fuel seller. It’s inevitable that EV use will spread, so renting out battery-powered cars as well as other related services will become necessary for gasoline retailers to remain profitable, he said.

Carmakers from Toyota Motor Corp. to General Motors Co. are racing to produce EVs as Bloomberg New Energy Finance estimates sales surpassed 1 million units last year. By 2030, BNEF expects more than 100 million EVs to be sold, though oil producer Exxon Mobil Corp. has a more conservative forecast of 20 million units.

Feeling Electrified

Global EV sales grow as Japan's gasoline consumption slumps

Source: Bloomberg New Energy Finance, Ministry of Economy, Trade and Industry

Either way, the spread of EVs will likely speed up the decline in Japan’s gasoline consumption, which is already falling due to a shrinking population and as more fuel efficient cars take to the roads.

“There is no point discussing how much and when EVs will become popular as people will shift to EVs to a point where it will have an impact at some time in the future,” Sugimori said in an interview in Tokyo. “As we don’t know the timing, we must start preparations now.”

Installing battery chargers at gas stations won’t be enough to generate profits in place of gasoline sales, Sugimori said. The company has started studying its options and plans to compile a strategy for gas stations within about one year, he said.




U.S. withdrew a record amount of natural gas from storage Source: U.S. Energy Information Administration, Weekly Natural Gas Storage Report

During the recent cold weather event that affected much of the eastern United States, more natural gas was withdrawn from storage fields around the country than at any other point in history. Net withdrawals from natural gas storage totaled 359 billion cubic feet (Bcf) for the week ending January 5, 2018, exceeding the previous record of 288 Bcf set four years ago.

Near the end of December 2017 and continuing into January, temperatures in the Lower 48 states, especially in the eastern half of the country, were significantly lower than normal. Similar to January 2014, sustained periods of cold temperatures resulted in high natural gas demand for heating, contributing to increased withdrawals from storage.

Population-weighted heating degree days, which are correlated with heating demand, increased to 273, indicating that weather was much colder than experienced during the previous record withdrawal, when heating degree days reached 255 for the week ending January 9, 2014.




Consumption of natural gas in the residential and commercial sectors reached 452 Bcf during the week ending January 5, compared with 348 Bcf during the previous week, according to estimates from PointLogic Energy.

PointLogic Energy estimated that total weekly natural gas consumption in the Lower 48 states increased by 150 Bcf, reaching 961 Bcf for the week ending January 5. Another 29 Bcf and 21 Bcf were exported by pipeline to Mexico and as liquefied natural gas (LNG), respectively.

Freezing temperatures also had an impact on natural gas production, as cold temperatures led to freeze-offs in the Appalachian and Permian basins. Freeze-offs occur when water vapor in the natural gas stream freezes and blocks the flow of gas.

Dry natural gas production totaled a record high of 539 Bcf during the December 29, 2017 report week, but declined to 517 Bcf during the following week, according to estimates from PointLogic Energy.

Pipeline imports from Canada and LNG imports increased during this period, partially offsetting some of the production declines, while withdrawals of natural gas from storage played a key role in meeting natural gas demand and limiting some market participants’ exposure to spikes in natural gas spot prices.

On a regional basis, the largest decline in natural gas storage was in the South Central region, where inventories fell by 153 Bcf. About half of that region’s decline was in South Central’s salt fields, which fell by 78 Bcf, or 26% of the previous week’s level. Salt fields are able to cycle gas much more rapidly than other storage types such as depleted fields or aquifers.

Working natural gas storage levels now total 2,767 Bcf in the Lower 48 states. If withdrawals from storage match the five-year (2013–17) average for the remainder of the heating season, which typically runs through the end of March, working gas stocks are expected to reach 1,310 Bcf, much lower than the previous five-year average level of 1,697 Bcf for the end of the heating season.




NewBase January 15 - 2018 Khaled Al Awadi

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

Brent crude rises to $70 on output cuts, ignores North America rig gains Reuters - Henning Gloystein

Brent crude oil prices rose to $70 a barrel on Monday, supported by ongoing output cuts led by OPEC and Russia, and ignoring a rise in U.S. and Canadian drilling activity that points to higher future output in North America.

FILE PHOTO: A driver reads a newspaper as he sits on a spare tire attached to a parked oil tanker at a truck terminal in Mumbai, India, January 10, 2018. REUTERS/Shailesh Andrade/File Photo

Brent crude futures LCOc1, the international benchmark for oil prices, were at $70 per barrel at 0558 GMT, up 13 cents from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $64.53 a barrel, up 23 cents.

Both benchmarks last week reached levels not seen since December 2014, with Brent touching $70.05 a barrel and WTI reaching as high as $64.77.

Oil price special

coverage




ANZ bank said on Monday oil prices had recently risen on data that continued to show the market is tightening.

Oil markets have been well supported by production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia which are aimed at propping up crude prices.

The cuts started in January last year and are set to last through 2018, and they have coincided with healthy demand growth, pushing up crude prices by more than 13 percent since early December.

But other factors, including political risk, have also supported crude.

“Tighter fundamentals are (the) main driver to the rally in prices, but geopolitical risk and currency moves along with speculative money in tandem have exacerbated the move,” U.S. bank JPMorgan said in a note.

Attracted by tighter supplies and strong consumption, financial investors have raised their net long U.S. crude futures positions, which would profit from higher prices, to a new record, the U.S.

Some analysts, though, have been warning of a downward correction after the sharp price gains since December.

“Many believe that oil prices above $60 will self-correct as this level of prices will encourage substantially more drilling in U.S. shale,” said William O‘Loughlin, investment analyst at Australia’s Rivkin Securities.

U.S. energy companies added 10 oil rigs in the week to Jan. 12, taking the number to 752, energy service firm Baker Hughes (GE.N) said on Friday.

That was the biggest increase since June 2017. ANZ bank said the jump came “as shale producers quickly reacted to the strong rise in prices in 2018.”

The picture was similar in Canada, where energy firms almost doubled the number of rigs drilling for oil last week to 185, the highest level in 10 months.

The high prices for crude, which is the most important feedstock in the petroleum industry, have also crimped profit margins for oil refiners, resulting in a decline in new crude orders.

Futures were little changed in New York after rising 4.7 percent last week. The curbs have contributed to stability in the market and the caps should remain, Iraqi Oil Minister Jabbar al-Luaibi




said in Abu Dhabi on Saturday. In the U.S., drillers added 10 rigs to fields last week, the most in more than six months, according to data from Baker Hughes Friday.

Oil has extended gains after a second annual advance as the Organization of Petroleum Exporting Countries and its allies trim supply to drain a global glut. Crude demand will expand by about 1.5 million barrels a day in 2018, OPEC Secretary-General Mohammad Barkindo said at a conference in Abu Dhabi.

“Oil looks comfortable at these levels,” said David Lennox, a commodity analyst at Fat Prophets in Sydney. “OPEC compliance remains a big factor to watch. The only headwind to higher prices is rising U.S. production.”

West Texas Intermediate for February delivery was at $64.36 a barrel on the New York Mercantile Exchange, up 6 cents, at 7:35 a.m. in London. Total volume traded was about 19 percent above the 100-day average. WTI rose 0.8 percent to $64.30 on Friday, the highest close since December 2014.




NewBase Special Coverage

News Agencies News Release January 15-2017

Hot Money's Pushing Oil to $70, but OPEC Should Keep Cool By Julian Lee

Brent crude touched $70 a barrel on Thursday, a level it last saw three years ago. That might start to look like a level where OPEC could say that its work to rebalance the market is done.

Crude Rally

Brent crude has been rising since Saudi Arabia began to cut its oil sales to the U.S.

Source: Bloomberg

After all, its output deal has done a pretty good job of draining surplus inventories. And U.S. oil stockpiles, including crude, refined products and the oil stored in the Strategic Petroleum Reserve, have fallen by around 147 million barrels in the past 12 months and now stand just 23 million barrels above their five-year average, according to weekly government data.

Draining Away

The total U.S. oil stockpile is approaching its 5-year average level after six months of draws

Source: Energy Information Administration

Note: Crude plus refined products, including oil in the Strategic Petroleum Reserve




But there is more to the run-up in oil prices than the drop in American stockpiles. And OPEC should should think very carefully before changing its strategy.

Inventory levels outside the U.S. are far more opaque. While the U.S. provides comprehensive data weekly, the Paris-based International Energy Agency only assesses OECD stockpiles with a 2-month time lag -- so the latest results are for the end of October.

They also show excess stockpiles coming down since the middle of 2017. But they also show the rising five-year average, the baseline for measuring excess crude, is having a much bigger impact on the amount of excess crude in storage than is the case in the U.S. That suggests inventories are still too high.

That is true whether you look at the absolute volumes of stockpiles, or the number of days of demand that they cover. If you move beyond the developed countries of the OECD, the picture is even less clear. So, while U.S. oil stockpiles may be approaching their five-year average level, the IEA data suggest the same is not yet true elsewhere.

This is not the only factor that OPEC and friends need to consider. By choosing once again to act as the world's swing supplier, seeking to balance the volume of oil available against the amount needed by consumers, they have thrown other producers a lifeline. You need look no further than the EIA's U.S. production figures.

U.S. output has soared on the back of rising prices and will continue to rise. The monthly assessment for October was more than 400,000 barrels a day above the level derived from weekly data. The daily average for U.S. oil production will exceed 10 million barrels by February, four months sooner than the government forecast last month.

Shale Surge

The latest increase in the forecast of U.S. oil production is driven by rising shale oil output

Source: Energy Information Administration

As I warned when OPEC and its friends embarked on this strategy back in 2016, it risked locking itself into a cycle of having to make ever longer and deeper cuts in order to meet rising output from other producers, particularly the U.S. There is already talk of U.S. producers locking in these prices, not just for 2018, but for 2019, 2020 and beyond, which will underpin continued output growth. The IEA expects that Brazil and Canada will also boost output at current prices.

To be sure, stronger-than-expected demand growth helped producers to drain excess stockpiles in 2017, and OPEC is forecasting a similar increase in the world's oil use this year. But that would




be the fourth year with demand growth running above 1.5 percent -- not unheard of, but there have only been two other such four-year stretches in the last 40 years. The IEA takes a slightly more cautious view, seeing global demand growth in 2018 at 1.3 percent. The difference seems small, but, together with more robust U.S. output, a lower pace of growth would be enough to wipe out the prospect of any 2018 stockdraw.

Rising end-user prices could start to dampen some of the consumer enthusiasm, particularly if they persist through the U.S. summer driving season. If demand growth isn't as strong as OPEC forecasts, then the group's expectation of arriving at a balanced market by late 2018 could be pushed back again.

For the immediate future, there is OPEC's perennial fear of the second quarter, when it sees demand for their crude weakening in the face of refinery maintenance. This was one of the reasons that they decided to extend their output deal, avoiding putting more oil into the market just as demand was expected to hit a soft patch.

Unanticipated supply disruptions -- most notably to the UK's Forties crude, which helps set the price of the global Brent benchmark -- helped to drive prices up to their recent height. The premium for prompt oil over future deliveries that resulted has drawn a flood of speculative money into crude, helping to prolong the upward momentum. OPEC and its friends shouldn't get distracted by this flood of hot money. Precipitate action to boost supply now would risk undermining the impact of their year of sacrifice.

This column does not necessarily reflect the opinion of NewBase and its owners.




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

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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.

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New base 15 january 2018 energy news issue 1128 by khaled al awadi