New base 21 december 2017 energy news issue 1117 by khaled al awadi

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NewBase Energy News 21 December 2017 - Issue No. 1117 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 Drydocks World awarded Turret Mooring System
construction contract from SBM Offshore
DUBAI, 20th December, 2017 (WAM) -- Drydocks World, the leading marine, onshore and
offshore service provider to the oil, gas and renewable energy sectors, has signed a contract
agreement with SBM Offshore to carry out the construction of the Turret Mooring System, TMS,
for Statoil’s Johan Castberg Floating Production Storage and Offloading, FPSO, vessel.
The Johan Castberg FPSO will be permanently moored by the internal TMS at the Johan
Castberg field in offshore Norway. The system will allow the vessel to passively weathervane
around the anchor legs while simultaneously transferring fluids, power, and communications
signals between the vessel and subsea equipment.

Drydocks World will be responsible for detail design of certain specified works, bulk procurement
and construction including Super Duplex piping work and TLER/TLIR module.
Drydocks World’s Chief Operating Officer, Mohammad Rizal, commented, "Drydocks World has a
strong track record in delivering Turret Mooring Systems with an excellent safety and quality
record.
We have delivered the world’s largest turret to SBM Offshore, which positioned our yard as a
global specialist with expertise in delivering large complex projects. This is the third turret that
SBM Offshore has awarded to Drydocks World.
Our long-term business relationship started from 1996 with the first FSO conversion and since
then we have successfully completed several FPSO projects. Drydocks World is committed to
once again delivering a safe and quality product in a timely manner that fully meets our client’s
expectations."

Russian Gazprom to splurge on EU and China gas pipelines
Bloomberg + NewBase
Russia’s natural gas exporter is channeling more money into its fight for market share as the U.S.
threatens its biggest European pipeline project with possible sanctions and looks to deliver more
fuel to the region by tanker.
Gazprom PJSC plans to spend 802 billion rubles ($13.7 billion, Dh50.3 billion) on routes to Europe
and China in 2018, almost 41 per cent more than this year, according to a draft budget prepared
for a board meeting Tuesday that was seen by Bloomberg News. The biggest project is its Nord
Stream 2 link to Germany, which had planned to start borrowing from banks next year before
being singled out in August for possible U.S. sanctions.
The threat of US measures against Nord Stream 2 has riled the European Union, which warned it
could retaliate if hurt any of its companies or their plans, while Russia has said the US is using
sanctions to clear space for exports of liquefied natural gas. Poland and Ukraine, key transit
routes for Russian gas, have lobbied against the 9.5 billion-euro ($11.2 billion) project.
“Before getting all the approvals to build Nord Stream 2, it’s complicated to raise project
financing,” Gazprom spokesman Sergei Kupriyanov said, without confirming any figures or
elaborating on the risk from sanctions. “Really, this can be done after finishing the approvals
process.”
Gazprom and its five EU partners, including Germany’s Uniper SE and Austria’s OMV AG,
stumped up 30 per cent of the Baltic Sea link’s budget by August. They planned for the project

operator, fully owned by Gazprom, to borrow the rest from banks. This plan may need to change
given the U.S. law, OMV said in September.
Gazprom, which has a monopoly on pipeline exports of gas from Russia, will contribute an
additional 1.52 billion euros for the under-sea section next year, in addition to ramping up
spending on the Russian network, as the company aims to keep the project on scheduled to start
gas flows in late 2019, according to the document.
The initial funding terms are still in place, one of the partners, Uniper, said by email. OMV, Royal
Dutch Shell Plc, France’s Engie SA and Wintershall, a unit of Germany’s BASF SE, either
declined to comment or didn’t respond.
Gazprom plans to supply 20 billion cubic metres of gas to Germany through the new link in 2020,
cutting the company’s current transit through Soviet-era pipelines in Ukraine, according to the
document.
Annual exports to Europe are forecast at about 188 billion cubic meters through 2020, close to the
record high expected this year, according to the budget. Outlooks are based on Gazprom’s
contract portfolio and current supply levels, Kupriyanov said.
Links to China and Turkey are also expected to start supplies by the end of 2019. Spending on the
Turkish Stream pipeline will exceed 2.43 billion euros next year, up 72 percent from this year, the
draft budget shows. The link is expected to pump almost 24 billion cubic metres in 2020,
according to the document.
The Power of Siberia pipeline to China will need 218 billion roubles next year, a 4 per cent
increase, and is set to deliver 5 billion cubic metres in 2020. While Gazprom sees investments
slowing from 2020 after the key export pipelines are built, it plans to keep dividends flat at this
year’s level of 190 billion roubles, the document shows. The company usually revises its budgets,
which don’t include its oil arm Gazprom Neft PJSC or utilities in Russia and Europe-based gas
traders, twice a year.

U.K: Essar's Oil Refinery Turning Toward Jet Fuel, Chemicals
Bloomberg - Dhwani Pandya
A global shift toward electrical vehicles is leading India’s Essar Group to reconfigure its U.K. oil
refinery and retail network to remain relevant in a rapidly evolving energy market.
In July, six years after Essar acquired the Stanlow refinery near Liverpool from Royal Dutch Shell
Plc, the British government announced a plan to ban sales of cars fueled by gasoline and diesel
by 2040. To hedge its investment, Essar has started an internal study to devise the best way to
move beyond ground-transportation fuels and shift its focus to aviation fuel and petrochemical
products.
The refiner will also put its first electric-vehicle charging station at a retail outlet it is building near
Stanlow next year, and will decide whether to plant more such charging points across its U.K.
retail network.
“We are currently undertaking a reconfiguration study which is for strategic importance, to focus
on the ever-changing landscape we operate in,” S. Thangapandian, chief executive officer of
Essar’s U.K. operations, said on a conference call from Stanlow on Wednesday. “This will help in
determining how we see the world in the next 10-15 years.”
With major countries including France, the U.K., China and India openly discussing the phasing-
out of fossil-fuel-powered cars in coming decades, international energy companies are adapting to
safeguard their future. Shell in November agreed to buy NewMotion, which operates 30,000
charging stations across Europe. BP Plc is studyinghow it might attract cars run by computers to
its fuel stations.

Essar is already modernizing Stanlow to increase its jet fuel supply to U.K. airlines, and depending
on the outcome of the internal study next year, may increase its petrochemical production to 20
percent of refinery output, from 6 percent currently, Thangapandian said.
Thangapandian said the plan is “in simple words, to move from transportation fuel which is the
main driver today, to other products with a longer life span in the market, like jet fuel and
petrochemicals.”
Electric vehicles will likely grow in popularity in the second half of the next decade due to plunging
battery prices, according to a report from Bloomberg New Energy Finance. The analysts see the
proportion of fully electric cars sold in the U.K. rising to one in 12 by 2030, from one in 200 today.
“Our modelling shows that 79 percent of new cars could be electric by 2040 in the U.K. even
under existing policies, thanks to rapidly falling battery costs,” said Albert Cheung, analyst at
Bloomberg New Energy Finance. “To close the gap to 100 percent, we’ll need to see much
greater investments in charging infrastructure, to make sure people have somewhere to plug in.”
Not all countries are on the same page. With tens of thousands of jobs at stake, Germany is
looking for ways to reduce automotive emissions without moving toward an outright ban on
vehicles with combustion engines. State and federal officials are set to meet next week in Berlin
with auto-industry executives to discuss possibly retrofitting cars currently on the street with new
technology to reduce pollution from exhaust.

India Refinaries Guzzles Russian Oil After 13B$ Refinary Deal
Bloomberg - Debjit Chakraborty
It isn’t hard to understand why Russia took part in the $13 billion acquisition of an Indian refinery
last year. In just seven months, Indian refiners have processed four times more Russian crude
than they did in the whole of the previous fiscal year.
The record crude purchase, mostly of Urals grade, shows how Russia is growing competitive to
the Middle East’s grip in the world’s fastest growing oil market. Russia is now the 11th biggest
exporter to India, overtaking Qatar and up from 21st place last year.
Russian Surge
Russia's oil supplies grow over four-fold in market dominated by Mideast
“Urals is becoming more and more favorable for Indian refiners because of its competitiveness to
Middle Eastern crudes,” said R. Ramachandran, refineries head of state-run Bharat Petroleum
Corp., which resumed purchases of the Russian grade after a three-year gap.
Indian refiners purchased 2.5 million tons of Russian oil during April-October, compared with
600,000 tons bought during the 12 months ended March 31, according to data provided by Indian
Oil Minister Dharmendra Pradhan in parliament this week. India, which imports more than 80
percent of its crude requirements, still gets close to two-thirds of supplies from the region led
by Iraq and Saudi Arabia.
“There’ll be good demand for Urals going ahead, as it will be a good fit in new refining capacities
such as Kochi and Paradip,” Ramachandran said. Indian refiners have also purchased other
Russian grades such as ESPO, Sokol and Sakhalin Blend.

India just got 400M$ of financing for new solar and wind energy farms
CNBC -Anmar Frangoul
Renewable energy in India is set to get a $400 million boost through a joint initiative backed by the
European Investment Bank (EIB) and India's Yes Bank.
In an announcement Tuesday, the
EIB said that Yes Bank would
manage the co-financing program for
the development of new solar and
wind facilities in India.
The EIB said that "eligible solar
projects" had been identified in the
states of Karnataka, Telangana,
Maharashtra and Rajasthan. More
wind and solar projects were
currently being examined, it added.
In 2016, the EIB provided 19.6 billion
euros ($23.20 billion) for climate
related investment across the globe.
"India and the European Union are committed to the Paris Agreement and tackling climate
change," Andrew McDowell, the EIB's vice president, said in a statement.
"This new $400 million initiative demonstrates the shared vision and commitment of both the
European Investment Bank and Yes Bank to increasing renewable energy power generation
across India," he added.

NewBase December 21 - 2017 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil prices stable but dips as U.S. production upto 10 million bpd
Bloomberg + Reuters + NewBase
Oil prices dipped on Thursday as soaring U.S. output, fast approaching 10 million barrels per day
(bpd), outweighed a drop in American crude inventories.
U.S. West Texas Intermediate (WTI) crude futures were at $58.02 a barrel at 0540 GMT, down 7
cents from their last settlement. Brent crude futures, international benchmark for oil prices, were at
$64.45 a barrel, down 11 cents.
Both crude benchmarks gained around 1 percent during their previous sessions, lifted by official
data showing a 6.5 million-barrel fall in U.S. crude inventories in the week to Dec. 15 to 436 million
barrels, the lowest level since October 2015.
Oil price special
coverage

Outweighing this on Thursday was another increase in American crude oil production, while a rise
in gasoline stocks pointed to a slowdown in demand.
The energy minister of Saudi Arabia, the world’s top crude exporter and OPEC’s de-facto leader,
said it would take more time to rein in a global supply overhang, which was created by strong
global production increases in the years up to 2015.
“We expect the first few months of 2018 to be either flat or a build (in inventories) as it is typically
the case with the seasonality with the oil market,” Khalid al-Falih told Reuters on Wednesday.
U.S. oil output is close to breaking through 10 million bpd, undermining efforts led by the
Organization of the Petroleum Exporting Countries (OPEC) and Russia to tighten the market
through withholding supply this year and next.
U.S. crude production hit 9.79 million bpd last week, its highest since the early 1970s, the only
time American output breached 10 million bpd. This brings U.S. output close to that of top
producers Saudi Arabia and Russia, which pump around 10 million and 11 million bpd,
respectively.
Oil traders this week also eyed with interest the passing of a U.S. tax bill, which is seen to weigh
on crude prices in the longer term. “The passage of the U.S. tax bill is ... a bearish long-term
development for oil and gas markets,” Barclays bank said.
“The policies ... are likely to reduce demand for gas and oil and raise supplies ... (as) the tax bill
preserves renewable energy tax credits, a tax credit for EVs (electric vehicles), and opens up
drilling in the Arctic National Wildlife Refuge.”
Oil Holds Gains Near Two-Week High After U.S. Stockpiles Tumble

Oil held gains near the highest close in more than two weeks after government data showed crude
stockpiles in the world’s largest economy slid more than forecast to a two-year low.
Front-month futures were little changed in New York after prices climbed 1.6 percent over the
previous two days. Government data Wednesday showed U.S. inventories fell 6.5 million barrels
last week -- more than double the average estimate in a Bloomberg survey -- to the lowest level
since 2015. Still, global stockpiles won’t be “anywhere close” to the level targeted by OPEC when
it meets in June, Saudi Arabian Minister Khalid Al-Falih said in an interview.
Oil is heading for a second yearly advance after the Organization of Petroleum Exporting
Countries and its allies including Russia decided to prolong production curbs through the end of
2018, with the goal of returning global stockpiles to their five-year average. Inventories will
remain below seasonal levels and continue to shrink through the second quarter of next year,
according to Goldman Sachs Group Inc.
“Larger-than-expected declines in U.S. crude inventories and comparably small gains in stockpiles
of refined products including gasoline are putting upward pressure on oil,” said Hong Sungki, a
commodities trader at NH Investment & Securities Co. “We may continue to see draw-down in
stockpiles until January and that can keep prices high.”
West Texas Intermediate for February delivery was at $58.05 a barrel on the New York Mercantile
Exchange, down 4 cents, at 11:33 a.m. in Seoul. Total volume traded was about 61 percent below
the 100-day average. The contract gained 0.9 percent to $58.09 Wednesday, the highest close
since Dec. 1.
Brent for February settlement lost 9 cents to $64.47 a barrel on the London-based ICE Futures
Europe exchange after adding 1.2 percent Wednesday. The global benchmark traded at a
premium of $6.42 to WTI.
See also: Oil Market ‘Undersupplied’ Through 2018, Bullish Jefferies Says

U.S. crude inventories slipped to 436.5 million barrels last week, while oil exports jumped by
772,000 barrels a day, the biggest increase on record, the EIA said on Wednesday. Meanwhile,
gasoline stockpiles climbed 1.24 million barrels, the smallest gain in four weeks, and distillate
supplies increased by 769,000 barrels.

NewBase Special Coverage
News Agencies News Release December 21-2017
Happy Holiday, Texas Power! Love, Texas Power , as a sample
By Liam Denning
The Electric Reliability Council of Texas recently released its usual year-end projections of the
state's power market. The outlook has shifted dramatically since May (which is when ERCOT
releases its first take every year) in one crucial respect: reserve margins.
This is the level of spare capacity versus expected peak demand, and Texas' rule of thumb is that
you want a buffer of 13.75 percent of that demand. Back in May, ERCOT projected a buffer of
18.9 percent next summer. That's been slashed by more than half to just 9.3 percent.
Dimmer
Estimates of Texas' spare generating capacity have been slashed since May, taking them well
below the 13.75 percent level usually viewed as adequate
Source: Electric Reliability Council of Texas
Note: Spare generating capacity as a share of summer peak demand.
Greg Gordon, an analyst with Evercore ISI, has helpfully compiled data showing how these
outlooks have moved over the years. To simplify things, the chart below shows just five years of

projected reserve margins for each of the December reports going back to 2013 (I've also thrown
in this year's May report for comparison):
Summer Is Coming
After years of expanding spare generating capacity, Texas suddenly faces the prospect of a tight
power market next summer
Source: Evercore ISI
Note: Projected spare generating capacity as a percentage of peak summer demand, by date of
ERCOT report.
This isn't because power demand is expected to surge; ERCOT has slightly raised its projected
growth rate across the next decade, but the forecast for peak demand in summer 2018 has
actually been cut by half a percent.
Instead, years of falling wholesale power prices due to all that excess capacity did their job and
pushed power producers to shut down plants. A net 2.5 gigawatts of expected summer capacity
has been taken out since ERCOT's last report in May.
The biggest contribution to that came from Vistra Energy Corp., which is closing 4.3 gigawatts of
coal-fired plants (the net number is lower because that measures both additions to capacity from
elsewhere and factors in capacity utilization of different plants).
Shutting down facilities is rarely a cause for celebration in corporate circles. In this case, though,
Vistra's self-help is not only good for the environment, but by tightening the reserve margin, it has
perked up Texas power futures no end:

Switching Off To Turn On
Vistra's closures pushed up summer 2018 power futures by about 50 percent
Source: Bloomberg
Shares in Vistra and NRG Energy Inc. -- another big Texas generator -- are actually lower or only
slightly higher, respectively, since those futures jumped. This is probably because they've been
overshadowed by other initiatives at both companies -- namely Vistra's acquisition of Dynegy
Inc. and NRG's ongoing activist-inspired process of trying sell assets and cut costs.
That may change as summer gets closer. In Texas, wholesale power prices can jump to a cap of
$9,000 per megawatt-hour when the grid is straining to meet demand.
But, as Evercore ISI's Gordon pointed out in a report this week, the state's power producers
haven't enjoyed such scarcity pricing since 2011, as excess capacity and the growth of cheap
wind power have kept a lid on the market. The sudden drop in spare capacity could generate a
few windfalls next summer, particularly if it's hotter than usual.
The flip-side of such prices is that they should encourage more generation. That doesn't
necessarily mean more capacity getting built. The biggest source of power in Texas is natural gas,
forecast by ERCOT to account for 65 percent of effective capacity next summer.
Yet the state's gas-fired plants are relatively underutilized, running only 34 percent of the time in
2016, according to data from the Energy Information Administration. With cheap gas flooding into
the region as a side-effect of surging oil output from the Permian shale basin, expect those plants
to run more -- which is why Vistra's been buying them.
On the other hand, higher pricing could provide further momentum for renewable-power sources.
Volatile electricity costs tend to make signing long-term power purchase contracts backing solar
projects particularly attractive for corporate or industrial electricity customers. These two groups,

which account for 63 percent of power consumption in Texas, are also likely to sign up for more
energy efficiency and demand-management programs if prices spike. These have risen steadily
over the years, from less than a gigawatt in 2014 to a projected 2.7 GW next year and 3.7 GW by
2022.
The last time ERCOT cut its projected reserve margin by anything like this year's dramatic move
was in December 2011, when the level of spare capacity over the following five years was cut
by 4.9 percentage points, on average, relative to the May report (this year's figure is 7.6 points).
It's worth examining just how quickly supply and demand responded to that the last time around:
Sparking A Reaction
Within a couple of years of ERCOT's December 2011 projection of a dramatic tightening of the
Texas power market, spare capacity jumped back up
Source: Electric Reliability Council of Texas
Note: Reserve capacity as a proportion of projected summer peak power demand by date of
ERCOT report.
The message there is that Texas' power producers should enjoy their self-made Christmas gift,
because it won't necessarily keep giving

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
The Editor :”Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced daily (Sunday to Thursday) and
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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 27 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 December 2017 K. Al Awadi

New base 21 december 2017 energy news issue 1117 by khaled al awadi

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