New base 1048 special 04 july 2017 energy news

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NewBase July 04 - 2017 - Issue No. 1048 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oman appoints consultant for coal-based power study
Oman Observer - Conrad Prabhu –
Finland-based international consulting and engineering services firm Pöyry has been selected by
the Omani government to study the feasibility of establishing a first-ever coal-based Independent
Power Project (IPP) in the Sultanate.
Pöyry’s appointment was confirmed to the Observer by a high level official of the Oman Power
and Water Procurement Company (OPWP), a member of Nama Group tasked with overseeing the
procurement of new power generation and related water desalination capacity under the Sector
Law.
“Pöyry is working with us in the preparation of a techno-economic study on the potential use of
coal for a proposed Independent Power Project (IPP),” said Yaqoob bin Saif al Kiyumi (pictured),
Acting CEO — OPWP.
“Pöyry comes with a lot of experience gained from its lengthy involvement in the power industry in
the wider region. They are involved in a coal based power project under way in the UAE, and are
familiar with the Oman market as well, having worked with us on a number of projects in the
Sultanate.”

The Finnish multi-disciplinary engineering firm is set to join a consortium of consultants being
assembled by OPWP to provide advisory services on all aspects of Oman’s maiden foray into
coal-based power generation.
A number of international
consultants are also in the race
for contracts to provide legal,
environmental and commercial
advisory services as well, with
appointments likely to be
announced towards the end of
the third quarter of this year, it is
learnt.
Provisional plans drawn up by
OPWP envisage a coal-based
plant of a capacity ranging from
1,500 to 2,500 MW. The optimum
size will be determined based on
the recommendations of the
techno-economic study, if indeed
the introduction of coal-based power generation gets the all-important green-light from the
government.
The proposed scheme will be executed on a Build-Own-Operate (BOO) basis, mirroring the
methodology currently in place for the execution of conventional natural gas-based power
projects.

Iraq: Taqa starts production at Kurdistan oil block
Atrush’s output expected to go up to 30,000 barrels of oil equivalent per day in 2017
Gulf News ( images inserted by NewBase )
UAE, Abu Dhabi National Energy Company (Taqa) announced on Monday that oil production has
started at its Atrush Block in the Kurdistan Region of Iraq. The Taqa-operated Atrush Block is
being developed together with
the Kurdistan Regional
Government, ShaMaran and
Marathon Oil.
“Starting operations at Atrush
is an important milestone for
Taqa, its co-venturers and the
Kurdistan Region of Iraq.
Atrush production will bring
long-term cash flows to Taqa
and we look forward to
operating the asset with a
commitment to the highest
standards of health, safety
and environmental
protection,” said Saeed
Mubarak Al Hajeri, chairman
of Taqa, in a statement.
The Atrush field is located
85km north-west of Erbil and
is one of the largest new oil
developments in the Kurdistan
Region of Iraq. It was
discovered in 2011 and
development started in 2013. Initial production is expected to ramp up to 30,000 barrels of oil
equivalent per day in 2017.
Taqa is the operator of Atrush and has a 39.9 per cent working interest in the production-sharing
contract. The other co-venturers are the Kurdistan Regional Government (25 per cent), General
Explorations Partners, Inc (a wholly-owned subsidiary of ShaMaran Petroleum Corp, with 20.1 per
cent), and Marathon Oil (15 per cent).

Saudi Acwa & Taekwang win IRC for Vietnam power project
ACWA – ( images inserted by NewBase )
Vietnam has issued the Investment Registration Certificate (IRC) to Nam Dinh First Power
Holdings, a Singapore-based joint venture incorporated by Saudi Arabia’s Acwa Power and South
Korea’s Taekwang Power Holdings, to implement the 1,200MW Nam Dinh 1 Thermal Power
Project.
The ceremony of IRC granting was held today (July 3) in Nam Dinh City, Nam Dinh Province in
the presence of representatives from Vietnam government agencies including the Ministry of
Planning and Investment, Ministry of Industry and Trade, Nam Dinh People’s Committee, State
Bank of Vietnam, Embassy of Republic of Korea and the Investors.
The Investment Registration Certificate is one of the most important milestones for the Project
pursuant to the Investment Agreement signed between the Ministry of Industry and Trade and the
Investors in January 2016.
The 1,200MW Nam Dinh 1 thermal power plant is being developed on a build-operate-transfer
basis over a 25-year term with total project cost of approximately $2.3 billion, 25 per cent of which
is funded with sponsors’ equity and the remainder with project finance from international financial
institutions.
The project will use domestic anthracite coal provided by the state coal mining group Vinacomin.
Electricity will be dispatched to the national 500kV grid and wholly purchased by Electricity of
Vietnam.

At c. 7,800GWh, the project will make a significant contribution to power generation capacity in the
northern part of Vietnam, in line with development strategy of power sector envisaged in Master
Plan VII of Vietnam. The investment in Nam Dinh 1 project with international financing partners
will support the government’s endeavour to meet the projected growth in power demand from year
2020 onwards.
Paddy Padmanathan, president &CEO of Acwa Power said: “While the granting of the IRC
represents a significant step in the development of this project, more importantly it demonstrates
the commitment of the Vietnamese government to protect foreign investors and to encourage the
participation of private investors in infrastructure expansion in the country.
We look forward to completing the financing arrangements and commence construction of the
power plant to enable us to contribute to the development of Vietnam by delivering reliable, safe
and cost effective electricity.”
Rajit Nanda, chief investment officer at Acwa Power said: “Ceremonies like the one taking place
today reaffirm Acwa Power’s commitment to Vietnam. The country has built a comprehensive plan
for power delivery and paired it with a robust legal and economic system that encourages private
international investment in critical infrastructure projects. We look forward to supporting Vietnam in
meeting its energy needs over decades to come.”
The project is scheduled to commence construction in early 2018 and the expected date of
commercial operation will be 51 months for the first unit and 57 months for the power facility, from
the date of commencement of construction.
Term of operation of the BOT contract is 25 years from the commercial operation date of the
power facility, after which the project company will be responsible for transferring the power facility
and related assets to Vietnam Government.

Libya's oil output tops one million barrels per day
Source: Reuters
Libya's oil production has risen to 1.012 million barrels per day (bpd), a Libyan oil industry source
told Reuters on Friday, topping one million barrels for the first time in four years.
State-owned National Oil Corporation (NOC) had targeted reaching one million bpd by the end of
July. Output has been helped by an interim deal with Germany's Wintershall to resume production
amid a contract dispute.
On Thursday, the same source said production had been fluctuating between 950,000 bpd and
close to 1 million bpd due to technical and power generation problems. He expected production to
stabilise at the higher end of that range "very soon".
Libya's oil sector has been dogged by unrest since the overthrow of leader Muammar Gaddafi in
2011. A power struggle involving various tribal, military and political factions has since affecting oil
infrastructure through port blockades and pipeline shutdowns. Libya, along with Nigeria, is exempt
from a deal between the Organization of the Petroleum Exporting Countries and non-OPEC
producers to curb output by around 1.8 million bpd.

NewBase 04 July 2017 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices fall ahead of US holiday after 8 days of gains
Reuters + NewBase
Oil prices retreated in early Asian trade on Tuesday, halting a run of eight straight days of gains
on signs that a relentless rise in U.S. crude production is running out of steam.
Brent crude futures fell 27 cents, or 0.5 percent, to $49.41 per barrel by 0354 GMT. U.S. West
Texas Intermediate (WTI) crude futures were trading down 24 cents, or 0.5 percent, at $46.83 a
barrel.
The falls came after both benchmarks recovered around 12 percent from their recent lows on
June 21.
Many traders closed positions ahead of the U.S. Independence Day holiday on July 4, while Brent
also faced technical resistance as it approached $50 per barrel, traders said.
Late May and most of June were overwhelmingly bearish as U.S. output rose and doubts grew
over the ability of the Organization of the Petroleum Exporting Countries (OPEC) to hold back
enough production to tighten the market.
But sentiment began to shift towards the end of June, when U.S. data showed a dip in American
oil output and a slight fall in drilling for new production.
"We see a recovery for oil prices in H2 2017 from current levels, with OPEC production cuts, a
slowdown in global supply growth and seasonally firming demand driving up prices," BMI
Research said, although it added that "large-volume supply additions will keep price growth flat y-
o-y in 2018."
Oil price special
coverage

An oil well owned and operated by Apache Corporation in the Permian Basin are viewed on
February 5, 2015 in Garden City, Texas. CNBC Oil Survey: 47% see more pain ahead for crude
BMI said it expected Brent to average $54 per barrel in the second half of this year, and to
average $55 a barrel in 2018.
It expects WTI to average $51 in the second have of 2017 and to average $52 next year.
ANZ bank said on Tuesday that the dips in U.S. production and drilling were "a small but
significant shift in the dynamics in the oil market" and that this would take some pressure off
OPEC's struggling efforts to rein in oversupply.
OPEC is leading a bid to tighten oil markets by pledging to hold back around 1.2 million barrels
per day (bpd) in output between January this year and March 2018.
Its efforts have been undermined by rising output from Libya and Nigeria, who are exempt from
the cuts, which helped push the group's June output to a 2017 high of 32.57 million bpd, about
820,000 bpd above its supply target.
Crude held Friday’s gains, trading to near three-week highs of $46.79 per barrel. Friday’s Baker-
Hughes rig count report revealed the first decline in 23-straight weeks, indicating U.S. production may
be peaking.
Offsetting this, a Reuters report indicated OPEC output rose by 280k barrels per day in June, largely
due to production hikes from Libya and Nigeria, which may well limit crude’s upside price potential
Plateauing U.S. output caused oil prices to see a 1.6% gain on Monday, continuing the longest streak
of daily price gains after Baker Hughes reported the first decline in active U.S. rigs in 24 weeks.
Stronger than expected manufacturing data reported by the Institute of Supply Management helped
buoy prices.
Technicals
Crude oil prices surged higher by 1.6%, and is poised to test the 50-day moving average at
47.47. Support is seen near the 10-day moving average at 44.19. Momentum has turned positive
as the MACD (moving average convergence divergence) index generated a crossover buy signal.
This occurs as the spread (the 12-day moving average minus the 26-day moving average)
crosses above the 9-day moving average of the spread.
OPEC Output Remains High
OPEC oil output reached a 2017 high in June as Libya and Nigeria continue a production recovery
despite the bloc’s efforts to ease a global supply glut, the results of a new Reuters survey shows.
Saudi Arabia and Kuwait have shouldered most of the cuts to ensure the bloc sticks to its
commitment to reduce production by 1.2 million barrels per day. Compliance to the deal will
remain in the 90-95 range, despite the production increase this month
While Goldman Sachs sees prices move lower, it appear that Citi believes prices have bottom.
One day after Goldman issued a confused, rambling note in which the bank cuts its 3-month WTI
price target by $7.50 from $55 to $47.50 saying “Spot WTI oil prices at $43 per barrel are now
back to November pre-OPEC deal levels, down from $52 per barrel just a month ago. Citi
increased their target.

NewBase Special Coverage
News Agencies News Release 04 July 2017
Inside Saudi Arabia’s Big Bet on Plastics
By Javier Blas
• Aramco says $20 billion complex near coast a ‘Game Changer!’
• Diversification push is part of crown prince’s post-oil plan
Under a tent in the Saudi desert, Ziad Al-Labban’s showing off his vision for the world’s largest oil
supplier—and it looks like an Ikea store.
Al-Labban has spent his career helping Saudi Aramco meet about 10 percent of global crude
demand, but right now all he wants to talk about are all the petrochemicals used in the modern
home he’s replicated at Sadara, the sprawling new $20 billion complex he runs in the industrial
hub of Jubail.
The mattress in the bedroom, the plates in the kitchen, even the Chevrolet Caprice in the
driveway—he’s too excited reeling off the vast array of products enhanced by his chemicals to
notice the scorching heat. At 46 degrees Celsius (115 Fahrenheit), it’s way hotter than most
places have ever been.

“Do you see that plasma TV?” Al-Labban asks enthusiastically, pointing to the entertainment
center in the model living room. “We will produce the chemical coating that goes into that screen.”
Al-Labban has managed Aramco units before, including in the U.S., but this one is like no
other. Sadara, a venture with Dow Chemical Co., emblazons its website with “Game Changer!” for
a reason. The facility’s completion is key to the kingdom’s efforts to diversify the economy,
develop new industries and create jobs for millions of youth. It’s the largest plant of its kind ever
built in a single phase, taking more than 60,000 workers five years to assemble.
Peak production is just weeks away, which is good news for Crown Prince Mohammed bin
Salman. With the economy flatlining and the budget strained, he’s put next year’s initial public
offering of shares in Saudi Arabian Oil Co., as Aramco’s formally known, at the center of his
“Vision 2030” blueprint for life after oil. Some royals expect a $2 trillion valuation, which would let
them raise $100 billion by selling just 5 percent, though many analysts expect half that.
Opening up the national cash cow to foreign investors for the first time since it was nationalized in
1980 is a major gamble for the kingdom’s traditionally conservative leaders. They’re betting that
spending billions of dollars to become a major chemical player will appeal to potential investors by
easing Aramco’s—and thus the country’s—dependence on crude output.
“Our goal is to be a top-tier energy and chemical company by 2030,” Abdulaziz Al-Judaimi,
Aramco’s senior vice president of downstream, said in an interview at the company’s
headquarters in Dhahran, two hours’ drive south of Sadara.

If all goes as planned, Sadara will crank out multiple tons of the glycol ethers, isocyanates and
other chemicals used in everything from golf balls and gum to sofas and soaps. But the ambitions
of Aramco, formed when the Saudis signed their first oil concession with U.S. investors in 1933,
don’t stop there.
With Sadara up and running, Aramco is drawing up plans for another $20 billion complex, this one
with Saudi Basic Industries Corp., or Sabic, until now the dominant chemical company in the
country.
“We will expand organically, but we also see inorganic opportunities,” Al-Judaimi said, suggesting
a deal-making appetite that’s rare for a company with little experience in mergers and acquisitions.
“Chemicals is a global business.”
While the diversification will reduce Aramco’s exposure to volatile energy markets, the sector
traditionally delivers low margins and requires know-how the company currently lacks. Its Petro-
Rabigh venture on the Red Sea with Japan’s Sumitomo Chemicals Co. Ltd. hasn’t turned a profit
in years.
Dammam number 7 well in Dhahran which marked the discovery of commercial quantities of oil.

Still, Al-Judaimi, one of Aramco’s top seven executives, said the company can achieve “a
significant increase in value per ton if we do chemicals rather than just refined fuels.” He said
Aramco and its partners boosted chemical capacity 60 percent last year to 28 million tons. It also
created a new subsidiary, yet to be named, to “oversee its rapidly growing chemicals and plastics
portfolio,” according to the prospectus for a recent Islamic bond sale.
Drawbacks to the pivot include “increased exposure to a low-margin, low-labor business,” said Jim
Krane, a research fellow at Rice University’s Baker Institute in Houston. Aramco concedes its
chemical investments won’t add that many jobs, but argues that they’ll drive growth in other
sectors that will.
Within the oil industry, chemical units have often been marginal to the bottom line, but crude under
$50 has changed the calculus for majors like Exxon Mobil Corp., Royal Dutch Shell Plc and Total
SA. Producing petrochemicals is usually more profitable when oil prices fall, making the feedstock
cheaper. Aramco has never published its accounts, but data from peers show that processing
crude into chemicals rather than fuel can earn several extra dollars per barrel.
In 2015, Aramco invested 1.2 billion euros ($1.37 billion) in a 50-50 venture with German
group Lanxess AG that makes elastomers, used to make golf balls more bouncy and chewing
gum softer. The joint venture, which is active in nine countries, reported 2016 earnings before
interest, taxes and amortization of $373 million.
IPO Concerns
For all the hype about capturing extra margin, through, the chemicals push presents significant
risks. If the gambit flops, the kingdom would have poured tens of billions of dollars into a low-
margin industry that could have been put to work elsewhere. Worse, after the IPO, foreign
investors may start demanding the company stick to its core competency—pumping crude.
The expansion is also a tacit acknowledgement that Aramco needs to adapt to the dramatic
changes in global energy use that analysts at the International Energy Agency, among many
others, see coming. The IEA predicts demand for passenger-vehicle fuel will increase just 0.1
percent a year through 2040, compared with a 1.5 percent annual rise in petrochemical
consumption.
“The chemicals business is growing faster than fuels, so investing in chemicals is a way to
mitigate the risks of our concentration on oil refining,” Al-Judaimi said. “We see a premium to
chemicals over fuel.”
Yet it’s not all about profit for Aramco. The 2030 plan envisions the company’s chemicals buildup
as a catalyst to spur manufacturing that will create jobs beyond oil. Such investments will “foster
the growth” of local industries, it said in its 2015 annual report.
Changing Model
Back in Jubail, the government is building a special zone called PlasChem Park that will be
“devoted exclusively to chemical and conversion industries that make direct or indirect use of
Sadara’s products.” Within a decade, Sadara expects companies based in the park to buy as
much as a third of its output. Halliburton Co. has already set up shop and Luxembourg-
based Ravago SA plans to start producing plastics there later this year.
Over at the canopied showcase, Al-Labban says his shiny new factory, which is crisscrossed by
2,500 kilometers of pipelines, is aiding the transformation of an economic model that has
dominated this country for most of the past century.

IEA study unveils key role for trucks in global oil-demand growth
Economic growth, particularly in Asia, will continue to boost oil demand from trucking in the future
Improving the efficiency of road-freight transport is critical to reducing the growth in oil demand,
carbon emissions and air pollution over the next decades, according to the International Energy
Agency’s latest report, The Future of Trucks: Implications for energy and the environment.
Trucks are a major contributor to the growth in transport-fuel consumption, as well as rising
carbon dioxide and air pollutant emissions. But the sector gets far less attention and policy focus
than passenger vehicles. Only four countries have energy-efficiency standards for heavy trucks,
compared with about 40 countries with passenger-vehicle standards.
Yet the growth in oil demand from trucks has outpaced all other sectors – including passenger
cars, aviation, industry and petrochemical feedstocks – since 2000 and contributed 40% to global
oil demand growth, a similar contribution as cars. Today, trucks account for almost a fifth of global
oil demand, or around 17 million barrels per day, equivalent to the combined oil production of the
United States and Canada. It also accounts for about half of global diesel use, a third of all
transport-related carbon emissions and a fifth of NOx emissions, a key air pollutant.
Trucks are a key enabler of global economic activity and play an essential role in delivering goods
or commodities across every point of the economic value chain, from production to sale.
But if no action is taken, oil demand from road freight is projected to grow by 5 million barrels per
day by 2050, or around 40% of the projected increase in global oil demand in that period. This
growth is expected to lead to a significant increase in carbon dioxide emissions of nearly 900
million tonnes through 2050, or about the same level of emissions growth as from coal use in the
power and the entire industry sector combined.
In an effort to address this rise in demand and emissions, the IEA describes a more sustainable
policy pathway for truck transport that could reduce energy use in road freight by 50% and
emissions by 75% by 2050.
“For far too long there has been a lack of policy focus on truck fuel efficiency. Given they are now
the dominant driver of global oil demand, the issue can no longer be ignored if we are to meet our
energy and environmental objectives” said Dr Fatih Birol, the IEA’s Executive Director. “Our study
highlights the gains that are possible from tighter truck fuel efficiency standards and sets out other
cost-effective steps to modernise freight transport.”
Three areas of improvement
The main drivers of oil demand from trucks today are the United States, the European Union and
China, while India is emerging as a growing contributor. Economic growth, particularly in Asia, will
continue to boost oil demand from trucking in the future.

The IEA highlights three major areas of improvement. First, the trucking sector can improve
logistics and systems operations in order to be more efficient. This includes near-term
opportunities like using Global Positioning System to optimise truck routing, as well as real-time
feedback devices that monitor the on-road fuel economy of trucks.
Greater improvements on that front will require increased cooperation, as well as the exchange of
data, information and assets across the entire supply chain. This can help increase the volume or
weight of cargo hauled to improve the load on each trip, but also reduce the number of trips during
which trucks are running empty, such as travel taken without any load at all after having delivered
the goods.
Second, the IEA report finds that energy-efficiency improvements for the existing fleet should
include aerodynamic retrofits to reduce drag as well as low-rolling resistance tires. New trucks can
use additional technologies that cut idling, use lightweight materials and take advantage of
improvements to truck engines, transmissions and drivetrains. Achieving stronger cuts in fuel use,
carbon dioxide and pollutant emissions requires the use of hybrids and zero emission trucks.
Finally, using alternative fuels such as natural gas, biofuels, electricity and hydrogen can diversify
fuel supply away from oil and also help reduce carbon emissions, especially if produced from low-
carbon pathways.
While some of the improvements necessary may be expensive or complex, many can be easily
accomplished in the near-term by strong policy support, according to the report. Some of these
opportunities include tightening fuel-economy standards, making better use of data and providing
support for research and development into alternative fuels.
2nd IEA Global Conference on Energy Efficiency brings together government and industry leaders

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
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Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
Mobile: +97150-4822502
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
NewBase July 2017 K. Al Awadi

Solar power is the key to renewable development in the GCC. Installed solar capacity is expected
to reach 76 GW by 2020, representing massive opportunity for suppliers in the region.
Co-located with The Big 5 Dubai, The Big 5 Solar launches this November 26 - 29th 2017. 20% of The Big 5
visitors in 2016 were looking for solar technologies making The Big 5 Solar an ideal platform to meet
dedicated buyers, get inspired at the Global Solar Leader's Summit and open up to new markets.

New base 1048 special 04 july 2017 energy news

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