New base special 18 march 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 1

NewBase 18 March 2014 Khaled Al Awadi

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

BP plans $1b petrochemical plant in Duqm BYA E JAMES , TIMES OF OMAN

British oil giant BP is negotiating with the Oman government to build a large petrochemical plant in Duqm, with an envisaged investment of over $1 billion, to manufacture acetic acid using a patented technology .

BP has signed a memorandum of understanding (MoU) with the Ministry of Oil and Gas to build the project, which will be of strategic importance to Oman's economy, Jamie Bowden, British Ambassador to the Sultanate, told Times of Oman in an exclusive interview.

"With this potential investment, BP intends to build the world's first acetic acid manufacturing plant using BP's new SaaBre

process. This is a breakthrough process in converting synthetic gas to synthetic acid, which will lead to a reduction in manufacturing costs," said Bowden, adding that only BP has this technology. "So, Oman can then become the holder of this technology. It (the project) will be the biggest plant of this type in the Middle East.

Acetic acid is a versatile intermediate chemical, used in a variety of products, such as paints, adhesives and solvents, as well as in the production of purified terephthalic acid, used extensively for manufacturing polyester.

Jamie Bowden, British

Ambassador to the Sultanate.




The ambassador also noted that the petrochemical project will offer several opportunities for downstream expansion. If everything goes as planned, the United Kingdom's investment in Oman will increase significantly

Bowden also pointed out that another $342 million investment in the Sohar Free Zone was recently announced by Tri-Star Resources - a joint venture formed by investors from the United Kingdom, Oman and the United Arab Emirates. The joint venture firm will "build a pyrometallurgical facility for the recovery or antimony as metal ingots or oxide powder from sulphide concentrates.

He claimed that the location of the facility in the Gulf region provides an excellent centralised logistics route, a supply of secure and relatively inexpensive energy, a modern infrastructure, an experienced workforce and strong industrial partners

BP's investment

The ambassador also noted that BP's $10 billion investment for developing the Khazzan tight gas project in north-central Oman has hugely increased the value of British investment in the Sultanate. "The Khazzan contract is of strategic importance for both countries. It represents a multi-billion dollar investment by a British company in a project that will last for decades," he said, adding, "The gas produced by BP will be an essential part of Oman's energy mix and therefore critical to the growth of the Omani economy.

He also remarked that BP has an extensive programme of training for Omanis to increase their numbers in important jobs. The company intends to employ large numbers of Omanis at all levels. "They will focus on in-country value and on ensuring that Omani SMEs can exploit to the fullest any opportunities that the project will create.

"The UK has been (for many years) by far the largest foreign investor in Oman, and currently, 36 per cent of all foreign investment in the Sultanate is British, which is far more than any other country," noted Bowden

The ambassador also highlighted the strong political and economic relations enjoyed by both countries over the last four centuries. "It is a relationship that is multi-faceted. So, there is a strong diplomatic relationship, a strong education relationship (many Omanis are studying in the United Kingdom), and there is a close cultural relationship."




Iraq: DNO International sets new production record at the Tawke field Source: DNO

DNO International, the Norwegian oil and gas company, has initiated production from two newly completed horizontal wells in the Tawke field in the Kurdistan region of Iraq at a combined rate of 37,000 barrels per day.

In one of the new wells, Tawke-21, eight productive fracture corridors penetrated by a 980-meter horizontal section in the main Cretaceous reservoir interval flowed an average rate of 9,700 barrels per day each. In the other well, Tawke-22, located six kilometers away, seven productive fracture corridors penetrated by an 800-meter horizontal section flowed an average rate of 8,800 barrels per day each. Both wells are subject to wellbore and surface facilities limitations.

'We hit a new production record of 129,000 barrels per day at the Tawke field on March 5 which is close to the limit of what we currently can deliver by pipeline and road tanker,' said Bijan

Mossavar-Rahmani, DNO International's Executive Chairman. 'With the exceptional results from these latest wells and the installation of early production packages and a new 24-inch pipeline, we are on track to meet our ambitious deliverability goal of 200,000 barrels per day in 2014,' he added.

Two previous Tawke horizontal wells came on production in the second half of last year, two wells are currently drilling and three more

are scheduled which, together with Tawke-21 and Tawke-22, will bring the total number of horizontal wells in the field to nine by year-end.

DNO International holds a 55 percent interest in and operates the Tawke licence. Genel Energy holds 25 percent and the Kurdistan Regional Government the remaining 20 percent interest.




US: CB&I and Chiyoda toBuild LNG liquefaction and export facilities Source: CB&I

CB&I and Chiyoda Corporation announced Monday the joint venture between CB&I and Chiyoda International Corp, a U.S. based wholly-owned subsidiary of Chiyoda, has been awarded a contract valued at approx. $6 billion by Cameron LNG to construct the Cameron Liquefaction Project in Hackberry, La.

The scope of work includes engineering, procurement and construction for the addition of natural gas liquefaction and export facilities to the existing LNG regasification facility. The Cameron Liquefaction Project will be comprised of three liquefaction trains with a nameplate capacity of approx. 13.5 million tons per year of LNG. In February 2014, Cameron received conditional authorization from the U.S. Department of Energy (DOE) to export domestically produced LNG to countries that do not have a free trade agreement with the U.S., including those in Europe and Asia.

'With more than 50 years of experience in the LNG industry, CB&I has a long history of successfully executing LNG projects all over the world,' said Philip K. Asherman, CB&I's President and Chief Executive Officer. 'This new award builds on our strong presence along the U.S. Gulf Coast, including Louisiana. This project will utilize a large number of engineering and construction craft workers, and we feel fortunate to be able to contribute to both the growth in jobs and the infrastructure in the state.'

'Chiyoda is a leading contractor for designing and constructing LNG plants, accounting for more than 40 percent of the world's total LNG production capacity,' said Shogo Shibuya, Chiyoda's President and Chief Executive Officer. 'Chiyoda has been accelerating its involvement in the development of LNG projects in North America, based on its innovative plant design and world-class project execution capabilities, with a relentless drive for safety and contributing to the local community.'

'The selection of CB&I and Chiyoda as contractors represents another significant milestone in the development of Cameron LNG liquefaction-export project,' said Octavio M. Simoes, Sempra LNG's President. 'The engineering, procurement and construction companies we've selected have the qualifications to build large liquefaction and energy infrastructure projects as well as a firm commitment to support our project's neighbors in southwest Louisiana.'

The project will create approx. 3,000 on-site jobs, as well as several hundred jobs at CB&I's fabrication facilities in Louisiana and several hundred engineering and project management jobs in the company's Baton Rouge, La., office to support the design, fabrication and construction of the facilities.

13.5 MTY




Subject to a final investment decision, finalization of permits and securing financing, Sempra Energy will have an indirect 50.2-percent ownership interest in Cameron and the related liquefaction project. The remaining portion of Cameron and the related liquefaction project will be owned by affiliates of GDF

SUEZ, Mitsubishi Corp (through a related company jointly established with Nippon Yusen Kabushiki

Kaisha (NYK)) and Mitsui & Co, each with 16.6-percent stakes.

About

Sempra Energy’s subsidiary Cameron LNG has received conditional authorization from the

U.S. Department of Energy (DOE) to export domestically produced liquefied natural gas

(LNG) from its proposed liquefaction facilities in Hackberry, La.,

to nations that do not have a free trade agreement (FTA) with

the U.S.

Subject to environmental review and final regulatory approval, the authorization conditionally

approves Cameron LNG to export up to 12 million tonnes per annum (Mtpa), or

approximately 1.7 billion cubic feet per day, of natural gas for 20 years.

“This authorization by the DOE represents a critical milestone in the development of our

export facilities,” said Debra L. Reed, chairman and CEO of Sempra Energy. “Exporting

natural gas will lead to the creation of thousands of new jobs and economic growth here in

the U.S. and enable our partners to deliver domestically produced natural gas to our allies

abroad and to the world marketplace.”

In January, the Federal Energy Regulatory Commission (FERC) issued the draft

environmental impact statement to construct and operate Cameron LNG’s liquefaction

project. It is the first liquefaction project pending before FERC to have reached this significant

permitting milestone.




Papua New Guinea LNG Schedule to Ship First Cargo by Middle of 2014 http://www.naturalgasasia.com/

The PNG LNG project remains on schedule to produce its first liquefied natural gas (LNG) cargo by middle of 2014 following the recent completion of its 292-kilometre onshore section of pipeline, the company said in a statement Friday.

The pipeline will transport natural gas from the Hides Gas Conditioning Plant to the Omati River, where it connects to the project’s 407-kilometre offshore section of pipeline and then to the LNG plant located near Port Moresby.

“This is yet another exciting milestone for the PNG LNG project and a great achievement for ExxonMobil PNG Limited, pipeline contractor Spiecapag, and, most importantly, for the people of Papua New Guinea,” said ExxonMobil PNG Limited senior project manager Sam Roxburgh.

The pipeline which took four years to complete is expected to transport in excess of 250 billion cubic metres of gas during the life of the project. PNG LNG is an integrated development that is commercialising the gas resources of Papua New Guinea. Gas will be exported to customers around the world. The project will produce 6.9 million tonnes of LNG per year.




Russia: Saipem to lay first line of South Stream offshore gas pipeline Source: Gazprom

On Friday in Amsterdam, Oleg Aksyutin, Chief Executive Officer of South Stream Transport and Stefano Bianchi, Senior Vice President of Saipem entered into contracts for constructing the first of the four offshore lines of the South Stream gas pipeline.

According to the signed contracts worth around EUR 2 billion, Saipem will generate the project documentation, build the first offshore line of the South Stream gas pipeline as well as erect process facilities in the shore crossing areas as well as construct the landfalls.

Pipes will be welded together on board a special pipe-laying vessel and then laid in a proper position on the seabed at a depth of up to 2,200 meters. The South Stream gas pipeline will be laid by two pipe-laying vessels of Saipem: Castoro Sei, an S-lay vessel suitable for both shallow and deep waters and Saipem 7000, a J-lay vessel that constructed the Blue Stream gas pipeline in the Black Sea in the early 2000s.

For the shore crossings, four micro-tunnels will be built on both the Russian and the Bulgarian side. This technology will allow preserving the Russian and Bulgarian coastlines. Preparations for micro-tunneling operations will start in June 2014.

Offshore construction will start in autumn 2014. The construction of the first offshore line will last until the third quarter of 2015. At the end of the same year the first line will be commissioned.

Background

The offshore section of the South Stream gas pipeline will consist of four parallel lines, each longer than 930 kms, across the Black Sea from the Russian coast to the Varna Port in Bulgaria. Each line will be made up of over 75 thousand 12-meter pipes.




South Stream Transport B.V. is responsible for constructing the offshore section of the South Stream gas pipeline. The company's shareholding is split among Gazprom (50 per cent), Italian Eni (20 per cent), German Wintershall and French EDF (15 per cent each).

On January 29, 2014 South Stream Transport B.V. signed a contract and launched a tender among Russian and German pipe plants with regard to the supply of 75 thousand 12-meter pipes with a diameter of 813 millimeters (32 inches) for the first string of South Stream's offshore section.

South Stream is Gazprom's global infrastructure project aimed at constructing a gas pipeline with a capacity of 63 billion cubic meters across the Black Sea to Southern and Central Europe for the purpose of diversifying the natural gas export routes and eliminating transit risks. The first gas will be supplied via South Stream in late 2015. The gas pipeline will reach its full capacity in 2018.

In December 2012 the South Stream gas pipeline construction started near Anapa in the Krasnodar Territory. On October 31, 2013 a festive ceremony of welding the first joint at South Stream's Bulgarian section took place. On November 24, 2013 the South Stream construction started in Serbia.

Saipem (a subsidiary of Italian oil and gas concern Eni) is one of the world's largest oil and gas industry contractors specializing in engineering and technical support of offshore energy projects.




Kenya: Turkana Oil Pipeline to Be Complete in Late 2016 http://allafrica.com/stories/201403180117.html

Kenya's Ministry of Energy and Petroleum predicts that the Lamu-Turkana oil pipeline will be completed by November 2016, after the project was fast-tracked at the request of the cabinet, Kenya's Daily Nation reported Saturday (March 15th).

"We want to expedite the project as an urgent one to realise revenues as early as possible," said Energy and Petroleum Principal Secretary Joseph Njoroge.

The ministry will issue international tenders for the pipeline's design and construction on Friday. The tenders will be conducted on a turnkey model, whereby the contractor carries out the project with their own funds before selling it back to the government upon completion.

The government had previously planned to exclude companies involved in exploration from bidding for the construction and design, including the London-based oil exploration firm Tullow Oil, but this restriction has been lifted. The pipeline will cost an estimated 255 billion shillings ($2.9 billion) and will connect the Lamu Port-South Sudan-Ethiopia transport corridor. Oil production is expected to begin in 2017-2018, according to the Ministry of Energy.




Pertamina to spend $4 Billion on O&G capex http://www.upstreamonline.com/live/article1355474.ece

Indonesia’s state-owned energy company Pertamina will spend about $4 billion to increase oil and gas production in Indonesia this year. A company executive announced the company would spend $3.75 billion to improve oil and gas and geothermal production.

Local media reported that Pertamina’s vice president of corporate communications said the funding was 24% higher than in 2013, and would be just under half of the company’s total spend.

Total investment expenditure for 2014 has been set at $7.8 billion. “The investment will be used to finance Pertamina’s more than 600 upstream projects this year in Indonesia as well as overseas,” the company reportedly said.

The company has set its production aim at 280,200 barrels of oil per day and 1568 standard cubic feet of gas per day this year. Pertamina is set to boost existing production up to 220,700 bopd, while another 59,500 bopd will be made available through block acquisitions.

The company has focused in on a number of projects this year, including the development of the Offshore North-West Java wells, which is set to increase production by 5300 bopd and 27 cubic feet of gas per day. Six fields will also be developed in the West Madura Offshore Block and the company’s subsidiary, Pertamina EP, will drill three more wells in the Paku Gajah field.

This year Pertamina posted a 97% five-year increase in net income, taking in $3.07 billion for 2013. This was an 11% increase in year-on-year figures, supported not only by the increase in production but the positive growth of oil and gas trading. Pertamina said it bucked the national trend of falling production, with year-on-year production jumping from 461,630 boe in 2012 to 465,220 boe in 2013.




Coal, gas or nuclear? Power-hungry SA must decide now Oman Observer By Olivia Kumwenda-Mtambo

South Africa’s long-term energy plans look solid, with coal, nuclear, gas and renewables all viable

options. But none are likely to prevent potentially crippling future power crunches in Africa’s

biggest economy unless a decision is made soon on when and how to add capacity to the grid.

South Africa’s failure to invest in new power plants nearly two decades ago meant it paid dearly in

2008 when the grid nearly collapsed, leading to power cuts that cost the economy billions of rand

in lost output and dented investor confidence. State-owned power utility Eskom is scrambling to

finish new power plants, including Medupi and Kusile, massive coal-fired outfits with a combined

capacity of about 9,500 megawatts (MW).

But they are still several years away from completion, and in the interim Eskom will be battling to

keep the lights on, nursing its fleet of ageing generating units and hoping breakdowns do not

reduce reserve margins to critical levels. The utility has declared four power “emergencies” since

November and earlier this month imposed rolling blackouts, known locally as “load shedding”, for

the first time in six years. Although they lasted only a day, the blackouts came at a bad time for

President Jacob Zuma and his governing African National Congress two months before a national

Arnot Power Station in Mpumalanga, South Africa, is a coal-fired power plant operated

by Eskom. Coal from the Arnot coal mine directly feeds the station.

Power generation is by six 350MW units with at total installed capacity of 2,100MW.[2]

Turbine Maximum Continuous Rating is 35.60%

In addition to feeding the South African grid, Arnot, along with Camden Power Station,

also feeds the Mozal Aluminium smelter in Mozambique via 400kV transmission

lines.[2]

Mozal consumes around 950MW.




election. The ANC is expected to win but its majority is likely to be reduced by public anger over

corruption scandals and deficient delivery of public services in many poor black townships.

The worst is not over, says Eskom, which provides 95 per cent of South Africa’s electricity and

has a total generation capacity of 42,000 MW. This is slightly less than Turkey but almost 10 times

more than Nigeria, sub-saharan Africa’s second biggest economy and top oil producer. Although

South Africa’s infrastructure is generally the envy of Africa, at the moment nearly a quarter of its

power generation capacity is out of action, mainly for maintenance. The first power from Medupi,

about 800 MW, is expected in the second half of this year. Eskom admits this will not prevent

more blackouts should the system come under further strain. Any event leading to a loss of more

than 1,500 MW could have a significant impact on the grid, Eskom said.

Eskom Chief Executive Brian Dames said South Africa was still feeling the repercussions of the

ANC government’s decision not to build new plants when asked by the utility to do so in 1998.

Construction of Medupi only started in 2007 and has been plagued by delays related to design

flaws and labour unrest. “It will take 10 years to fix the 1998 problem,” said Dames, who steps

down at the end of this month. In its 20-year Integrated Resource Plan (IRP), running up to 2030,

the government says coal, nuclear, hydro, shale gas and renewable energy are all options to beef

up power supply. And after the 2008 debacle, the government realises it could pay a heavy price if

it does not decide in time on the next phase of power construction when Medupi and Kusile are

complete.

“We are working around the clock to arrive at decisions quickly,” Public Enterprises Minister

Malusi Gigaba said. The IRP is revised every two years, the latest revision being last year.

Cabinet has yet to approve the updated plan which proposes a delay in construction of more

nuclear power plants and a focus instead on coal, hydro and gas. Eskom’s problems are

compounded by increasing maintenance needs at its decades-old plants, and unplanned outages.

It also faces challenges relating to the quality of coal fed into its power stations. The recent

blackouts were imposed after torrential rain soaked coal stockpiles and the coal could not be fed

properly into the system.




“I don’t think there is nearly enough attention being given to the supply of coal for Eskom. That’s

an area government needs to do more work on,” said Mike Rossouw, chairman of the Energy

Intensive Users Group, which represents heavy power users such as mines and factories.

Eskom’s coal stockpiles are mostly kept in the open, in part because of the high cost of storage,

and so are prone to damage from heavy rain. Storage bunkers are available but not enough to

protect all the coal and the problem is compounded by most of Eskom’s supply coming from

exposed open-pit mines.

Diversify the energy mix

Eskom generates most of its electricity from coal-fired plants but also has one nuclear plant, gas

turbines, hydro-electric and wind facilities. Coal is likely to remain the main feed stock for base-

load power, given that South Africa is a major producer and exporter of coal. To diversify its

energy sources and reduce its reliance on coal plants, South Africa started three years ago to

procure renewable power from independent producers. To date, the government has signed off on

64 renewable energy projects with a combined capacity of 3,850 MW. Eskom said 19 projects had

been connected to the grid to date.

Analysts say more needs to be done to allow private players in – and not just for renewable

energy, which is struggling to produce power at rates Eskom deems competitive with coal. “The

industry is by far not deregulated enough. We need to have more participants in base-load

generation in South Africa,” said Cornelis van der Waal, an energy analyst at consultancy Frost &

Sullivan. “Whether that base load is coal,

nuclear, gas or hydro, let’s leave that to the

industry to decide who can supply the most

reliable electricity at the best rate.”

NewBase Recommend Power generation solutions :- South Africa, predominantly, has radioactive geothermal heat sources. Given high enough temperatures of these heat sources, it is possible to heat water or steam to high enough temperatures to make electricity production possible.




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

Your partner in Energy Services

Khaled Malallah Al Awadi, MSc. & BSc. Mechanical Engineering (HON), USA ASME member since 1995 Emarat member since 1990

Energy Services & Consultants Mobile : +97150-4822502

[email protected]

[email protected]

Khaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 years of experience in theof experience in theof experience in theof experience in the Oil &Oil &Oil &Oil & Gas sector. Currently working as Gas sector. Currently working as Gas sector. Currently working as Gas sector. Currently working as

Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for 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 sthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were sthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were sthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations pent as the Gas Operations pent as the Gas Operations pent as the Gas Operations

Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , heManager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , heManager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , heManager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developed has developed has developed has developed

great experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructing of gas pipelines, gas metering & regulof gas pipelines, gas metering & regulof gas pipelines, gas metering & regulof gas pipelines, gas metering & regulating stations and in the engineering of supply ating stations and in the engineering of supply ating stations and in the engineering of supply ating stations and in the engineering of supply

routes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many Mroutes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many Mroutes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many Mroutes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs for OUs for OUs for OUs for

the local authorities. He has become a reference for many of the Oil & Gasthe local authorities. He has become a reference for many of the Oil & Gasthe local authorities. He has become a reference for many of the Oil & Gasthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andConferences held in the UAE andConferences held in the UAE andConferences held in the UAE and Energy program broadcasted Energy program broadcasted Energy program broadcasted Energy program broadcasted

internationally , via GCC leading satelliteinternationally , via GCC leading satelliteinternationally , via GCC leading satelliteinternationally , via GCC leading satellite ChannelsChannelsChannelsChannels . . . .

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

NewBase 18 March 2014 K. Al Awadi

Economy & Finance

New base special 18 march 2014