New base 08 october 2017 energy news issue 1081 by khaled al awadi

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NewBase Energy News 08 October 2017 - Issue No. 1081 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: Dubai makes moves to install solar carports in cities
The National - LeAnne Graves
Dubai Electricity and Water Authority (Dewa) has launched a new project to install solar panels in
the emirate, Dewa said on Friday. The first two locations for solar carports will be at the Dewa
headquarters near Wafi Mall and at the Ministry of Climate Change and Environment building.
“We aim to spread the experience to a large number of public and private buildings in Dubai,
supporting national efforts to reduce [the UAE's] carbon footprint and increase the proportion of
solar energy in the environment-friendly energy mix in Dubai,” said Waleed Salman, Dewa’s
executive vice president of business development.
The two projects will generate nearly 2,000 kilowatts, or the equivalent of removing 300
cars from the road.
“Through the project, we intend to provide comfort and enhance the happiness of our
stakeholders, to fulfill our mission, in line with our core values, as well as promote the initiative
among all stakeholders, both individuals and institutions, in the public and private sectors,” said
Saeed Al Tayer, managing director and chief executive of Dewa.
The scheme is part of Shams Dubai, an initiative launched in 2015 to add solar power to buildings
throughout the emirate. Mr Al Tayer said that the utility had completed linking its network with 450
residential and commercial buildings through Shams Dubai, producing 17.7 megawatts of solar
energy.
Under the Dubai Clean Energy Strategy 2050, clean
energy will make up 7 per cent of the emirate’s total
energy generated by 2020, 25 per cent by 2030 and 75
per cent by 2050.
Mr Al Tayer added: This will happen by providing
practical examples of green and sustainable buildings, to
spread a culture of sustainability, reduce energy
consumption, and dependence on traditional energy
sources, and help Dubai’s government organisations
achieve the goal set by the Dubai Supreme Council of
Energy to reduce by 20 per cent the energy consumption
in all government buildings by 2020.”

Saudi Aramco IPO on track for 2018 – officials
Source: Reuters ( images by NewBase)
A plan to list Saudi Aramco in 2018 is on track, senior Saudi officials said in Moscow on Thursday,
as Saudi Arabia gears up to sign a string of investment agreemen ts with Russia.
The plan to float around 5 percent of Aramco in an initial public offering (IPO) is a centerpiece
of Vision 2030, a wide-ranging reform plan to diversify the Saudi economy beyond oil which is
being championed by Saudi Crown Prince Mohammad bin Salman.
'Work is ongoing to list Saudi Aramco in 2018,' Aramco’s Chief Executive Amin Nasser said at an
energy forum in Moscow. 'We will be looking at (evaluating) investors as we continue to make
progress related to timing and location.'
Saudi Energy Minister Khalid al-Falih, who is also Aramco’s chairman, said on Thursday that the
IPO would happen in the second half of 2018, adding that the listing would be used as a 'catalyst'
for the opening up of the Saudi economy.
The announcement about the company’s IPO will be made 'in due course', he said while taking
part in a panel discussion of an energy forum in Moscow. Prince Mohammad has said the IPO,
which could be the world’s biggest, will value Aramco at a minimum of $2 trillion and could raise
as much as $100 billion.
Money raised from the sale will be used to develop other sectors and industries in the country.
Aramco’s listing is planned on Saudi Arabia’s local stock market plus at least one overseas
exchange. New York, London and Hong Kong are the main contenders.

Nasser said the Saudi government would decide on the listing venue and that there were no
current talks with Russian companies on them taking part in the IPO.
Investment deals
Both Falih and Nasser are part of an official Saudi visit to Moscow. Saudi King Salman is in
Russia on a state visit, the first to Moscow by a reigning Saudi monarch. Several investment
agreements will be signed during King Salman’s trip and plans for a $1-billion fund to invest in
energy projects are likely to be finalised. These are part of efforts by two of the world’s biggest oil
producers to increase cooperation.
Russian Energy Minister Alexander Novak said on Wednesday Russia and Saudi Arabia would
sign joint investment agreements worth more than $3 billion during the visit. One of those was a
memorandum of understanding signed on Thursday between Aramco and Russia’s oil trading
company Litasco. Other similar agreements with Gazprom, Gazprom Neft, and Sibur will also be
signed.
Nasser said Aramco was discussing several investment opportunities with Russian firms. 'LNG
(liquefied natural gas) is one of the area where we are looking to collaborate with Russian
partners,' he said, giving an example of the MoUs that will be signed with Gazprom and Gazprom
Neft.
The Russian Direct Investment Fund on Thursday will also sign an MoU with Aramco and Saudi’s
Public Investment Fund for investments in energy services and manufacturing. Al-Falih said
Thursday that the details of the IPO “will be announced in due course,” without elaborating.
The sale of 5 percent of Saudi Arabian Oil Co., as Aramco is formally known, is the cornerstone of
the country’s Vision 2030, a much wider plan conceived by Crown Prince Mohammed bin Salman
to reshape the economy and diminish its dependence on oil. The government has said the sale
could value the company at as much as $2 trillion, though analysts have tended to give lower
estimates.
Oil prices, a key consideration in determining the
valuation, have fallen since mid-2014. While a
Saudi-led deal between OPEC and Russia has
curbed crude output this year, prices remain
around the mid-$50s a barrel and may not
average $60 until 2019, according to analyst
forecasts compiled by Bloomberg.
If Saudi Arabia achieves its $2 trillion valuation,
the 5 percent stake it plans to sell would raise
about $100 billion. That would eclipse the $25
billion raised by Alibaba Group Holding Ltd. in
2014, the current record.

Aramco signs five key deals with Russian firms
Reuters
Saudi Aramco has launched a wide range of strategic business collaborations with Russian
companies with the signing of five memoranda of understanding (MoUs) covering many areas of
energy and manufacturing sectors and innovation.
The MoUs were signed as part of the Royal visit to Russia by Saudi Arabia's King Salman bin
Abdulaziz Al-Saud.
The MoUs inlcude:
1. MOU with Saudi Public Investment Fund and Russian Direct Investment Fund – Investment
in Energy Services & Manufacturing: The MoU will pave way for new business development
in the energy value chain, oilfield services and manufacturing, the Ras Al Khair maritime
yard development and potential partnerships in the Energy Industrial City developed by
Saudi Aramco.
2. MOU with Gazprom – Gas Collaboration: The MoU will enable Saudi Aramco and Gazprom,
Russia’s premier gas company to develop a significant business portfolio in international
upstream gas, allowing the introduction of new vendors and suppliers to the kingdom’s
market. Among the elements of the MoU are LNG trade, LNG value chain and exploration /
development as well as product storing.
3. MOU with LITASCO – Trading Collaboration: The MoU will see collaboration with Swiss-
based LITASCO (the international marketing and trading arm of Lukoil – one of Russia’s
largest oil companies) which will give Saudi Aramco and the kingdom access to
Mediterranean refineries where Russian companies have been expanding. The proximity of
the Mediterranean with the Red Sea provides an important strategic supply point to the
kingdom.
4. MOU with Gazprom Neft – Technology and R&D collaboration: The MoU with Gazprom Neft
(a subsidiary of Gazprom and Russia’s fourth largest oil producer) will involve technology
and R&D collaboration as well as training.
5. MoU with Russian Direct Investment Fund and SIBUR – Strategic marketing for
petrochemicals: The MoU will enable all parties to jointly evaluate potential opportunities for
cooperation in the petrochemicals sector, including marketing of petrochemicals products,
both on in Russia and Saudi Arabia.
Meanwhile, Amin H Nasser, Saudi Aramco
president and CEO said the rich endowment
of resources of both Saudi Arabia and
Russian can enable companies from both
countries to collaborate in creating synergies
for a sustainable energy future with business
and operational initiatives driven by
technology, research and innovation.
He was speaking at a panel discussion at
the Saudi-Russian Business Investment
Forum organised by the Saudi Arabian
General Investment Authority (Sagia), the
Council of Saudi Chambers, and the

Russian Direct Investment Fund (RDIF).
Nasser said vast opportunities for collaboration between companies from Saudi Arabia and
Russia are created by both the kingdom’s existing economic pillars and the development and
diversification envisaged by Saudi Vision 2030.
Nasser outlined a number of areas for potential collaboration with Russian companies in industrial
localization; international gas; downstream petrochemicals; technology, research and innovation;
trading; and climate change and carbon management.
Nasser also provided strategic insights on the future of energy and how Saudi Arabia and Russia
could pool their sizable resources together in driving the global energy transformation by factoring
in alternative energy which can complement oil’s existing preeminence, particularly gas and
downstream / chemicals.
Nasser stressed that all these could only be achieved with technology, research and innovation.
Saudi Aramco considered this as key drivers of future success, and Saudi Aramco’s goal is to be
a world-leading creator of energy and chemical technologies.
“We have already established eight research centres around the world that complement our main
research facilities in Saudi Arabia. Considering Russia’s considerable strengths in science and
technology, as well as highly talented researchers, scientists and engineers, we are exploring
collaboration in R&D field,” he said.
Trading, according to Nasser, would also be an integral enabler to the strategic partnership with
Russian entities involving opportunities in and refined products swaps, trading logistics, shipping
and storage facilities, and new market venturing.
He also highlighted Saudi Aramco’s industrial localisation program In-Kingdom Total Value Add,
or iktva, as another area of opportunity for Russian services and manufacturing companies to
collaborate with Saudi partners.
“Considering the large oil and gas resources possessed by our two countries, we also have a
common interest in strengthening oil’s position and there are numerous to collaborate in these
areas,” he said.

Kuwait oil revenues to hit $40.64bln for FY17/18
REUTERS/Stephanie McGehee
By the end of September 2017, the first half of the current fiscal year 2017/2018 ended and the
average Kuwaiti oil price for September scored US$ 52.3 per barrel, up by US$ 3.8 per barrel,
7.8%, from August’s average price of US$ 48.5 per barrel.
It is also higher by US$ 7.3 per barrel, 16.2%, than the new budget hypothetical price of US$ 45
per barrel. The last fiscal year 2016/2017 which ended on March 31, 2017 scored an average
price for Kuwaiti oil by US$ 44.7 per barrel.
The average price of oil for September 2017 is 17% higher than the barrel average price for the
past fiscal year but it is lower by US$ -18.7 per barrel than the parity price for the current budget at
US$ 71 per barrel, according to the Ministry of Finance estimates after deducting the 10% for the
Future Generations Fund, says Al-Shall Economic Report prepared by Al-Shall Consulting Co
headed by Jassem Al-Saadoun.
According to the monthly follow up report of the State’s Financial Administration Accounts —
August 2017/2018 — issued by Ministry of Finance, Kuwait has received about KD 5.304 billion in
actual oil revenues until the end of August.
Therefore, Kuwait would achieve oil revenues in the amount of KD 12.3 billion for the entire
current fiscal year, which is higher by KD 0.6 billion than the estimated amount of oil revenues for

the budget at KD 11.7 billion. Adding KD 1.6 billion in non-oil revenues, projected budget
revenues would score KD 13.9 billion for the current fiscal year.
Comparing this figure with KD 19.9 billion for expenditures allocations, it is likely that the budget
for 2017/2018 would face hypothetical deficit by KD 6 billion. If we assume saving by 6.3% in
public expenditures, like last fiscal year, actual expenditures would drop to KD 18.6 billion, which
is mere estimate, the public budget then would face a KD 4.5-5 billion deficit.
Kuwait Clearing Company issued its report titled “Trading Volume According to Nationality and
Category” from 01/01/2017 to 30/09/2017 published on Boursa Kuwait official website.
The report indicated that individuals are still the largest group, their share started to increase and
they captured 49.44% of total value of sold shares (47.2% for the first nine months of 2016) and
49.39% of total value of purchased shares (42.1% for the first nine months of 2016).
Individual investors sold shares worth KD 2.341 billion and purchased shares worth KD 2.339
billion with a net trading, selling, by KD 2.576 million.

Mauritania/Senegal: CH2M wins marine engineering support
contract on BP's Tortue development offshore Source: CH2M
CH2M has been awarded a new marine engineering support contract on BP's innovative Tortue
development offshore Mauritania and Senegal. The new energy development project involves
subsea gas production, a floating gas treatment facility, a pipeline with domestic gas connection
points and a nearshore hub facility where the gas is converted into liquefied natural gas (LNG).
The hub facility provides breakwater-protected berths for a floating LNG production unit and for
international export of LNG by ship.
CH2M's preliminary front end engineering design (Pre-FEED) deliverables support final decision-
making on the hub location, layout, and the form and method of construction of the inshore hub
and support to marine operations and project execution planning.
BP named KBR as an Engineering Services Contractor for the Tortue development, and KBR
selected CH2M as the BP-approved civil and marine engineering support provider. According to
Dr Colin Skipper, CH2M Vice President and Practice Director, 'CH2M has a strong civil and
marine works portfolio for global energy producers, and we are pleased to perform a critical role
working with KBR on this technically challenging project for BP. Delivering this project requires
deep technical experience and innovative thinking--qualities on which our reputation has been
built.'
With a longstanding oil and gas industry service record, CH2M has worked for major energy
producers on many projects around the world for over 30 years. Civil and marine engineering
support for the Tortue are being delivered in the UK by CH2M's international terminal, pipeline and
infrastructure engineering team.

US: Hurricane Nate threatens Gulf Coast energy sites
Reuters
In about 8,000 feet of water, Shell's Perdido offshore drilling and production platform is the world's
deepest offshore rig.
Hurricane Nate was heading on Saturday toward refineries, offshore oil platforms and other
energy facilities in the central Gulf Coast that largely were spared by Hurricane Harvey's wrath
nearly six weeks ago.
• Hurricane Nate was heading on Saturday toward refineries, offshore oil platforms and other energy
facilities in the central Gulf Coast that largely were spared by Hurricane Harvey's wrath nearly six weeks
ago.
• The fast-moving storm has curtailed 92 percent of daily oil production and 77 percent of daily natural gas
output in the Gulf of Mexico, more than three times the amount affected by Harvey.
• Nate could become a Category 2 storm before landfall later on Saturday, the National Hurricane Center
said.
The fast-moving storm has curtailed 92 percent of daily oil production and 77 percent of daily
natural gas output in the Gulf of Mexico, more than three times the amount affected by Harvey,
which packed more of a punch when it hit the Texas coast.
Nate could become a Category 2 storm, the second weakest on a five-category scale used by
meteorologists, with winds of up to 110 miles per hour (177 km per hour) before landfall later on
Saturday, the National Hurricane Center said.
Its track takes it closer to offshore production unlike Harvey, whose impact was greatest on
refining centers. Output shut in by Nate on Saturday amounted to 1.61 million barrels of oil per
day and 2.48 billion cubic feet of natural gas per day, according to the Bureau of Safety and
Environmental Enforcement (BSEE).

The storm was 105 miles (170 km) south of the mouth of the Mississippi River on Saturday
afternoon and moving at a rapid 25 mph, the NHC said.
The Gulf of Mexico is home to about 17 percent of
daily U.S. crude output and 5 percent of daily
natural gas output, according to government
estimates. Workers had been evacuated from 301
platforms and 13 rigs as of Saturday, the BSEE
said.
Colby Goatley, a meteorologist at Weather
Decision Technologies Inc, said his firm is helping
about 10 drilling rig operators chart a course away
from Nate, which is producing up to 30-foot (9.1-
meter) waves near its center, he said.
"Rigs on the eastern side (of Nate) are racing
westward to get on that more favorable side," he
said. A few rig operators are heading further east
to avoid winds that are strongest to the east of the storm's eye. Weather Decision is expecting
tropical storm-force winds to last about 12 hours, Goatley said, a relatively short period that will
help offshore producers return to full operations quickly and rigs return to their drilling sites.
Refinery precautions
Nate is converging on refineries that remained in operation during Harvey, with Phillips 66's
Alliance plant, Valero Energy Corp's Meraux facility, and PBF Energy's Chalmette refinery closest
to its current track. Chevron Corp's Pascagoula, Miss., plant also is within the impact zone.
Phillips 66 confirmed that it shut its
247,000-barrel-per-day Alliance
refinery on Saturday. Alliance,
which is 25 miles (40 km) south of
New Orleans, is close to the path
Nate is forecast to take over
southeastern Louisiana.
Valero and PBF Energy were
planning to keep running during
Nate's passage, according to
sources familiar with those
operations. Those two plants and
Alliance account for about 3
percent of U.S. refining capacity.
Chevron said it has made
preliminary preparations for the
storm, including securing loose
equipment and positioning standby generators. A spokesman declined to comment further on the
operation. The Pascagoula plant accounts for about 2 percent of U.S. refining capacity.
Harvey, which brought intense rains that flooded the Texas Gulf Coast, shut nearly a quarter of
U.S. refining capacity and a similar amount of Gulf of Mexico oil production. At least one of the
Harvey-affected refineries is still working to resume full production.

US: Renewable Bio- gas increasingly used to meet part of EPA’s
renewable fuel requirements Source: U.S. EIA, based on U.S. Environmental Protection Agency
Renewable natural gas (RNG), which is derived from biogas collected at landfills and other
facilities, is increasingly used to meet government targets for renewable fuel production. In 2016,
about 189 million gallons of RNG were used to meet about 82% of federal targets set specifically
for cellulosic biofuel.
The Renewable Fuel Standard (RFS) is a program implemented by the U.S. Environmental
Protection Agency(EPA) to promote the incorporation of biofuels in the nation’s fuel supply. Earlier
this year, EPA released a proposed rule to determine 2018 renewable volume obligations, and
total volumes will remain largely unchanged from 2017 levels. Volume obligations for two
categories—advanced biofuel and cellulosic biofuel—were slightly reduced from 2017 levels.
In previous years, when targets for those categories were not met, EPA has exercised
its cellulosic biofuel waiver authority to account for shortfalls. In 2016, for instance, only 189
million gallons of cellulosic fuel were produced, less than EPA’s renewable fuel volume
requirement of 230 million gallons and far below the original congressional volume target of 4.25
billion gallons for that year.
Renewable natural gas is increasingly used to meet the cellulosic biofuel requirement. A 2014
EPA rule expanded the agency’s interpretation of cellulosic biofuel to include biogas consumed as
compressed natural gas (CNG) and liquefied natural gas (LNG) produced at landfills, municipal
wastewater treatment facility digesters, agricultural digesters, and separated municipal solid waste
digesters. These biogases are then processed to be indistinguishable from pipeline-quality natural
gas.

Combined production of liquefied RNG and compressed RNG grew from 33 million gallons of
ethanol equivalent in 2014 to 189 million gallons in 2016. EPA projects 238 million gallons of
cellulosic biofuel will be produced in 2018, of which 221 million gallons are expected to be CNG or
LNG derived from renewable natural gas.
Source: U.S. Energy Information Administration, based on U.S. Environmental Protection Agency
Renewable natural gas can be produced several ways. At landfills, organic matter naturally
decomposes, and a network of perforated pipes collects landfill gas with the aid of a vacuum. At
other waste facilities that involve wastewater effluent, agricultural residues, or separated municipal
solid waste, an anaerobic digester unit may be used to break down organic matter. As of June 30,
2017, approximately 50 facilities were registered with EPA to produce RNG, a number that is likely
to increase given announced capacity additions.
Landfill biogas typically has an energy content of about 500 British thermal units per standard
cubic foot (Btu/scf), which is about half the average energy of natural gas delivered to
consumers in 2016. As a result, RNG is often mixed with higher energy-dense gases such as
propane to increase its heat content and achieve pipeline-quality natural gas.
RNG can be used to fuel CNG and LNG vehicles, which sometimes serve as alternatives to
medium- and heavy-duty vehicles that would otherwise run on diesel fuel. The market for CNG-
and LNG-fueled vehicles has increased over time, but it still represents a fraction (0.16% in 2016)
of total natural gas consumption.
Because RNG is generally more expensive than traditional natural gas, its demand is primarily
based on its characteristics as a renewable resource that can help meet reduction targets for
greenhouse gas emissions.

NewBase 08 October 2017 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil down, WTI plunges 3%, settling at $49.29, Brent fell 2.4%
settling at $55.62 breaking 4 week win streak
Reuters + NewBase + Bloomberg
Oil futures fell more than 2 percent on Friday, ending Brent crude’s longest multi-week rally in 16
months as oversupply concerns reappeared as producers have started hedging future drilling.
Brent futures settled down 2.4 percent, or $1.38 a barrel, to $55.62, snapping a five-week winning
streak that was the longest since June 2016. For the week, Brent lost 3.3 percent.
U.S. West Texas Intermediate (WTI) crude dropped $1.50 to $49.29, a 3 percent decline, putting
losses on the week at 4.6 percent.
Oil price special
coverage

Russia clarified remarks made by President Vladimir Putin about the oil market earlier this week,
saying he did not propose extending a global oil output cut deal but said he recognized it was a
possibility.
“Yesterday we had Russia and the Saudis talking about extending cooperation, and today we saw
a little bit of backtracking with respect to additional cuts in production.” said Houston-based
consultant Andrew Lipow. “What the market gained yesterday is clearly being given back today.”
The prospect of extended oil production cuts by the Organization of the Petroleum Exporting
Countries and other producers led by Russia had supported prices in recent sessions. Saudi
Arabia’s energy minister said on Thursday he was “flexible” about prolonging the production-
curbing pact until the end of 2018.
However, concerns linger about growing U.S. crude exports, due to a hefty WTI discount to Brent
prices, which makes U.S. oil more competitive. U.S. crude exports’ rise to a record of nearly 2
million barrels per day last week and the growth in U.S. production to 9.56 million bpd has fanned
some concerns about oversupply.
Producer hedging has picked up as oil hit $50 a barrel, according to Bank of America analysts,
who said that if producers keep boosting hedging, “they can limit the sensitivity of production to
spot prices and continue to increase output in 2018.”
BofA noted that about 115 million barrels have been hedged since late August after lower-than-
usual volumes of hedging in the early part of the year.
Supply may be somewhat restricted in the coming week, however, as the impending arrival of
Tropical Storm Nate had already shut in 70 percent of offshore U.S. oil and gas production,
according to the U.S. Bureau of Safety and Environmental Enforcement.

The lack of a rally on Nate’s approach suggests that perhaps “the risk premium is baked into the
cake from the active hurricane season, which is going to be gone soon,” said Richard Hastings,
macro strategist at Seaport Global Securities in Charlotte. The Baker Hughes’ report on the U.S.
oil drilling rigs, an early indicator of future output, showed the rig count fall in for the fourth week
out of the last five.
Oil’s Stint Above $50 Ends
West Texas Intermediate, the U.S. benchmark, skyrocketed above $52 a barrel at the end of
September, teasing investors. But the rally didn’t last long. After hedge funds sliced their net-long
position on WTI and pulled back from record bets on rising Brent prices, oil had slipped as low as
$49.10 on Friday.
“We just rallied too far, too fast,” said Clayton Rogers, an energy derivative broker at SCS
Commodities Corp. in Jersey City. “I think it was just time for a correction.”

After September’s 9.4 percent rally, the usual suspects re-emerged: Saudi Arabia and other
OPEC members increased production, Libya restartedits biggest oil field and U.S. output reached
a two-year high. On Friday, when concern eased over the impact of Tropical Storm Nate on U.S.
Gulf Coast production, WTI dropped below its 200-day moving average.
Investors had initially been concerned over the storm, “given how it’s another punch to the Gulf
Coast refining corridor and deep-water Gulf production platforms, but that fear has receded,” said
Chris Kettenmann, chief energy strategist at Macro Risk Advisors LLC, in interview in New York.
“People are basically taking money off the table, locking in profits from the September rally, and
getting out of the market”
It doesn’t help that U.S. crude stockpiles remain above their five-year average by more than 70
million barrels at a time when refineries are starting to shut for maintenance. Meanwhile, the top
American shale plays, led by the Permian and Eagle Ford basins in Texas, are set to produce
a record amount of crude this month.
Hedge funds reduced their WTI net-long position -- the difference between bets on a price
increase and wagers on a drop -- 1 percent to 249,323 futures and options in the week ended Oct.
3, U.S. Commodity Futures Trading Commission data show. Shorts rose 4.1 percent, while longs
edged up 0.5 percent.
As for Brent, the net-long position on the global benchmark declined 0.9 percent to 504,263
contracts, after reaching an all-time high the previous week, according to data from ICE Futures
Europe.

In the fuel market, money managers decreased their net-long position on benchmark U.S.
gasoline by about 8 percent. Diesel remained a bright spot, with the net-bullish position on the fuel
extending its surge to a record a little bit, up 0.4 percent.
The strength in the diesel market, used to power trucks, trains and industrial equipment, stems
from an improving global economy that’s boosting demand, said Rob Thummel, managing director
at Tortoise Capital Advisors LLC, which handles $16 billion in energy-related assets. But in the oil
market, doubts around whether the Organization of Petroleum Countries and its allies will extend
a deal to curb production and manage to drain the global glut continue to weigh on prices.
Saudi King Salman bin Abdulaziz and Russian President Vladimir Putin talked up their supply-cut
deal in a historic meeting in Moscow, suggesting it could be extended, but with so many signs
pointing to a glut, their boost to prices was short-lived.
“Oil’s had a heck of a run for the month of September,” Thummel said. “The continued concerns in
the market that keeps the shorts active: Is OPEC compliance waning? Will their compliance start
to be less? Will they start to cheat more?”
Crude Oil forecast for the week of October 9, 2017, Technical Analysis
WTI Crude Oil
The WTI Crude Oil market broke down during the week, slicing through the $50 level. I think that
the $49 level is massively supportive, so if we can break down below there I think that the market
continues to go lower, perhaps reaching towards the $47.50 level underneath. Alternately, if we
can break above the $50 level, the market should then go towards the $52.50 level.
The markets continue to look volatile, and this pullback is probably to be expected. We have a
significant amount of oversupply in the market occasionally coming in and affecting the pricing.
However, there are a lot of concerns about OPEC, but quite frankly I think it is starting to become
very obvious that OPEC has lost its ability to control pricing, and perhaps some of its members.

Brent
The bread market broke down below the bottom of the shooting star from the previous week, so
that was a technical cell signal. We tested the $55 level, and I think that if we can break down
below that level, the market probably goes down to the $52.50 level underneath, which has been
important in the past.
Alternately, if we break above the top of the weekly candle for the past week, we could go back
towards the $60 handle. A break above there census market much higher. I think we continue to
see a lot of volatility, as there is a significant amount of oversupply in the marketplace. Ultimately,
I think that we have gotten a bit overextended, so I think it’s only a matter of time before we drop,
which at the very least would be an opportunity to pick up value, if not start shorting this market if
the support comes back into play.

NewBase Special Coverage
News Agencies News Release 08 October 2017
Battery costs to fall by up to 66pc by 2030
NewBase + Bloomberg + Reuters
The cost of battery storage for stationary applications could fall by up to 66 per cent by 2030,
according to a new report published today by the International Renewable Energy Agency (Irena).
An intergovernmental organization based in Abu Dhabi, UAE, Irena aims to promote adoption and
sustainable use of renewable energy. It was founded in 2009 and its statute entered into force on
July 10, 2010. The falling price of batteries could stimulate 17-fold growth of installed battery
storage, opening up a number of new commercial and economic opportunities, said the Irena
report.
Launched during the ‘Innovation for Cool Earth Forum’ in Tokyo, Japan, Irena’s Electricity Storage
and Renewables: Costs and Markets to 2030 assessment of electricity storage in stationary
applications also found that global storage capacity could triple if countries double the share of
renewables in the energy system.

"As storage technology improves and prices decline, both utility-scale and small-scale, distributed
applications could grow dramatically, accelerating renewable energy deployment," remarked Irena
director-general Adnan Z. Amin.
"In this dynamic, low-carbon energy environment, now is a crucial time for storage technology,"
noted Amin. "This research demonstrates that the business case for renewable energy continues
to strengthen, thus positioning it firmly as a low-cost and secure source of energy supply," he
added.
The report, which is focused on stationary applications, highlights that while pumped-hydro
systems currently dominate total installed power storage capacity, with 96 per cent of the installed
electricity storage power globally,
economies of scale and technology
breakthroughs will support the
accelerated development and adoption of
alternative storage technologies, such as
lithium-ion (Li-ion) batteries and flow
batteries.
Stationary electricity storage can directly
drive rapid decarbonisation in other key
segments of energy use, such as in the
transport sector where the viability of
battery storage for electric vehicles (EVs)
is improving fast, said the report.
At the end of 2016, the cost of Li-ion
batteries had fallen by as much as 73 per
cent for transport applications from 2010,
it stated.
While Li-ion batteries in stationary
applications have a higher installion cost
than those used in EVs, in Germany,
small-scale Li-ion battery systems have
also seen their total installed costs fall by 60 per cent between the fourth quarter of 2014 and the
second quarter of 2017.
"The growth of lithium-ion battery use in electric vehicles and across the transport sector over the
next 10 to 15 years is an important synergy that will help drive down battery costs for stationary
storage applications," remarked Dolf Gielen, the director of the Irena Innovation and Technology
Centre and an author of the report.
"The trend towards electrified mobility will also open up opportunities for electric vehicles to
provide vehicle-to-grid services, helping feed a virtuous circle of renewable energy and storage
integration," he stated.
"Storage technology will deliver service flexibility to the grid and electricity storage to small-scale
rooftop solar applications in markets where commercial and residential electricity rates are high,
and grid feed-in remuneration is declining," he added.

Germany Backs European Battery Champion to Take on Tesla
The Europe Union’s biggest economy may be warming to the creation of bloc-wide battery
consortium to take on the likes of Tesla Inc. and Panasonic Corp.
German industrial and automotive giants including BASF SE and BMW AG have been invited to a
meeting in Brussels on Oct. 11 being led by the European Union’s top energy official, Maros
Sefcovic, who has pledged as much as 2.2 billion euros ($2.6 billion) for battery development.
Chancellor Angela Merkel’s government welcomed the talks aimed at creating a European battery
consortium, which was first reported by the Financial Times.
“It’s right and important that the commission finally addresses the issue of battery cell
manufacturing on an EU level,” said Economy and Energy Ministry spokeswoman Beate Baron by
phone Wednesday. “We need European sovereignty on key technologies and battery cells are
one of the most important differentiating factors for electric mobility.”
The move by Brussels underscores growing European awareness that key industries risk falling
behind if they don’t plug manufacturing gaps in energy storage technology. Lithium-ion batteries
are poised to power the next generation of plug-in cars. They also promise to help balance electric
grids transmitting renewable energy like wind and solar.
The European Commission views battery production in the EU as a “strategic objective and
believes that major business decisions on battery cell investments need to be taken quickly,” EU
energy spokeswoman Anna-Kaisa Itkonen said in an email on Wednesday. European companies
must cooperate “across the supply chain, to drive mass and, to the extent possible, to share
investments.”
Nascent Production
Batteries and electric transmission account for about 40 percent of passenger cars’ costs and the
gap in nascent European production is largely being filled by Japanese and South Korean battery
makers like Panasonic, LG Chem Ltd. and Samsung SDI Co. In the U.S., Tesla has built its
own battery Gigafactory to satisfy demand for the cars it produces.

While German carmakers have woken up to the need to secure battery supplies by the time
millions of electric automobiles start rolling off production lines next decade, their response has
lagged behind international peers. Volkswagen AG, Daimler AG and a group of companies that
includes ThyssenKrupp AG have all started separate initiatives. In Germany, less than 1 percent
of registered cars on the road are electric.
Merkel’s government would support creation of a consortium of companies that share unit
production and sales, according to a senior member of Merkel’s chancellery. Getting leading
industrial companies to back such a plan will be challenging as it may conflict with their own
internal strategies, said the person, who asked not to be identified in exchange for discussing
internal policy deliberations.
What’s Cheaper Than Lithium-Ion?
The cost of energy storage is, roughly, the up-front capital cost of the storage device, divided by
the number of cycles it can be used for. If a battery costs $100 per kwh and can be used 1,000
times before it has degraded unacceptably, then the cost is one tenth of a dollar (10 cents) per
cycle. [In reality, the cost is somewhat higher than this – there are efficiency losses and cycles in
the far future are potentially worth less than cycles now due to the discount rate.]
Lithium-ion batteries suffer from fairly rapid degradation. Getting 1,000 cycles out of a li-ion battery
with full depth of discharge (draining it completely) is ambitious. Tesla’s PowerWall battery is
warrantied for 10 years, or 3,650 cycles, which appears to be possible only because the battery is
never fully drained. What Tesla sells as a 7kwh battery is actually a 10kwh battery that never
allows the final 3kwh to be drained.
Other energy storage technologies, however, are far more resilient than lithium-ion.
Flow batteries can potentially be used for 5,000 – 10,000 cycles, with complete discharge every
time, before needing refurbishing.
Adiabatic compressed air energy storage (CAES) uses tanks and compressors that are certified
for 30 years or more of continuous use, meaning more than 10,000 cycles, again at complete
discharge rather than the 70% discharge possible in lithium-ion.(In addition, CAES can be used to
store energy for weeks, months, or years, something that batteries can’t do due to leakage.)
As an added bonus, CAES systems and some flow battery systems can be made with abundant
elements that are cheaper and available in higher volumes than lithium. For instance:
LightSail Energy‘s compressed air tanks are made of carbon fiber, the primary ingredient of which
(carbon) is the 4th most abundant element in the universe, and roughly 1,000x more abundant in
the earth’s crust than lithium.
ESS’s flow batteries are comprised almost entirely of iron, which is at least several hundred times
more abundant in the earth’s crust than lithium.
[To be clear, lithium is available in quantities sufficient to make at least hundreds of millions of
Tesla-class electric vehicles. There is no near-term lithium crunch. But there may be a long-term
one.]
How big is the price advantage of more and deeper discharges? It’s difficult to compare apples-to-
apples, because neither compressed air nor any flow battery chemistry have reached anywhere
near the scale of lithium-ion. They haven’t gone nearly as far down the learning curve. At the
same time, the cost of materials for a flow battery, for instance, should be comparable to or lower

than for a lithium-ion battery.That’s approximately true for compressed air as well (though some
more interesting differences apply, which I may return to in a future post.)
If we assume then that flow and compressed air have similar up-front costs to lithium-ion, and a
similar learning curve, we can project what a unit of electricity stored and retrieved in them will
cost. We’ll do so by giving them a (conservative) 50% cost advantage to account for their many
times longer lifetime. In reality, their cost advantage in the long term may be larger than this.
Even at 50%, however, we find that flow batteries and compressed air are much cheaper than
lithium-ion, and reach the price points of a few cents per kwh much sooner. In the graph below,
we see that, assuming a similar learning rate, flow batteries and compressed air reach around 4
cents per kwh round-tripped at around 1 million MWh of storage versus 10 million MWh for lithium-
ion. They reach a price of 2 cents per kwh round-tripped (a true fossil-fuel killer of a price) at
around 10 million MWh stored, versus 80 million MWh for lithium-ion.
Obviously, the above is just a projection. And for flow batteries and CAES, we have far less of a
track record than for lithium-ion. Some preliminary data does support the notion that they’ll be
cheap, however.
Redflow, a maker of zinc-bromide flow batteries, sells batteries with a cost of storage around 20
cents per kwh. And zinc-bromide is well off the left side of the graph above, many many steps in
its learning function away from the beginning of the chart.
ESS is a graduate of the ARPA-E GRIDS program, which set a goal of $100 per kwh capital costs
of batteries, for batteries that can run for many thousands of cycles. The math there points to
batteries that eventually cost a few cents per kwh.
We cannot be certain that any technology will follow a trajectory on a graph. Fundamentally,
though, the presence of the learning curve in nearly all industrial activities, combined with the
longer lifetimes of flow and CAES systems, suggests that their prices will drop well below those of
lithium-ion.

The disadvantage of both flow batteries and CAES is that their energy density is low. To hold they
same amount of energy, both flow and CAES are larger and heavier than lithium-ion. As a result, I
expect to see a divergence over time:
Lithium-ion and its successor technologies (perhaps metal air) will be used for electric vehicles
and mobile devices.
Bulkier, heavier, but longer-lasting and deeper-draining storage technologies like flow batteries
and CAES will be used for stationary power for the electrical grid.
Cheap, Zero-Carbon Power, 24/7
Solar power and wind power are each headed towards un-subsidized prices of 2-3 cents per kwh
in their best areas, and perhaps 4 cents in more typical areas.

New natural gas costs around 7 cents per kwh. As solar and wind steal hours from natural gas
plants (because they’re cheaper when the sun is shining and the wind is blowing), natural gas
plants will sit idle longer. As a result, the price of natural gas electricity will rise to perhaps 10
cents per kwh, as the up-front capital cost of natural gas plants is spread over fewer kwhs out.
To compete with that on a 24/7 basis, we need storage that costs no more than 5 or 6 cents per
kwh, and ideally less.
In other words, we need to cut the price of energy storage by a factor of 5 or 6 from today’s prices.
We’ve already cut energy storage prices by a factor of 10 since the 1990s. And if current trends
hold, the world is very much on path to achieving cheap enough storage to allow 24/7 clean
energy, and doing so in the next 15-20 years.
—-
There’s more about the exponential pace of innovation in both storage and renewables in my book
on innovating in energy, climate, food, water, and more:The Infinite Resource: The Power of Ideas
on a Finite Planet

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
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For additional free subscription emails please contact Hawk Energy
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
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 25 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

New base 08 october 2017 energy news issue 1081 by khaled al awadi

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