Lean: From Theory to Practice â One Cityâs (and Libraryâs) Lean Story⌠Abridged
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New base 24 january 2018 energy news issue 1132 by khaled al awadi
1. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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NewBase Energy News 24 January 2018 - Issue No. 1132 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: Adnoc strikes three-year deal to supply Lotte Chemical
Titan with 1 mn tons of naphtha a year
The National - Mahmoud Kassem
The Abu Dhabi National Oil Company (Adnoc) signed a three-year deal with Lotte Chemical Titan
to sell the Malaysian petrochemical company up to 1 million tonnes of naphtha a year as the
Emirateâ largest hydrocarbon producer increasingly strikes long-term deals to sell its products.
âWith this agreement we are implementing a new approach toward our sale of naphtha,â said
Abdulla Al Dhaheri, the director of marketing, sales and trade at Adnoc.
âPreviously we have sold the product on shorter term, one-year contracts. By switching to a three-
year contract we are capturing long-term market access and securing offtake. It is another
example of how Adnoc is committed to mutually beneficial partnerships.â
Adnoc produces more than 12 million tonnes of naphtha a year. It can be used for
petrochemical-based products, including plastics used in cars, durable goods, detergent and milk
bottles and food packaging. The agreement was signed at Adnocâs headquarters by Mr Al Dhaheri
and Lee Dong Woo, the president and chief executive of Lotte Chemical.
âDemand for petrochemicals in South East Asia is expanding steadily and this three-year
agreement with Adnoc will ensure security of naphtha supply, enabling us to expand and diversify
our product portfolio and diversify our product portfolio,â Mr Lee said.
2. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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ADNOC Exploration and Production
ADNOC produces over 3.15 million barrels of oil per day, and over 8 billion standard cubic feet of gas
per day, which places us among the largest energy producers in the world
We are committed to producing a target of 3.5 million barrels of oil per day by 2018, with due
consideration of prevailing market conditions, and are constantly researching, developing and
implementing innovative technologies and approaches that will enable us to enhance recovery
and ensure improved production efficiency.
Processing and Refining
ADNOC produces fuel for transportation, energy for heat and light, lubricants to keep engines and
industries moving, and petrochemical products that positively impact the lives of millions of people
around the world.
We are committed to strengthening and expanding our processing and refining businesses to
optimize the application of our resources, while developing and producing a wide-range of new
and innovative products that benefit customers worldwide.
The following ADNOC businesses are responsible for processing, refining and transforming our oil
and gas into a variety of products that enhance our quality of life:
Abu Dhabi Oil Refining Company (Takreer)
Takreer is a leading oil refining company, with a total production capacity of almost 900,000
barrels per day, specializing in crude oil and condensate refining, supply of petroleum products
and production of granulated sulphur.
Abu Dhabi Polymers Company (Borouge)
Borouge is an innovative chemical and plastics solutions provider, with a total production capacity
of 4.5 million tons of polyolefin per year, specializing in the development of sophisticated, value-
added plastics for fast-paced industries.
Ruwais Fertilizer Industries (Fertil)
Fertil is the Middle Eastâs leading producer and supplier of environmentally friendly Granular Urea
and Ammonia Fertilizers, producing up to 3,300 metric tons of Ammonia per day and up to 5,800
metric tons of Urea per day.
Abu Dhabi Gas Industries Ltd., (GASCO)
GASCO is one of the worldâs largest natural and associated gas processing companies, with a
process capability of 5.5 billion standard cubic feet of feed gas per day. The company operates 3
desert plants for gas processing and natural gas
liquids (NGL) extraction, an NGL Fractionation
Plant, and a pipeline distribution network.
Abu Dhabi Gas Liquefaction Company Ltd., (ADGAS)
ADGAS is a natural and associated gas processing
company, with a process capability of 8 million tons
of Liquefied Natural Gas, Liquefied Petroleum Gas,
Paraffinic Naphtha and Liquid Sulphur per year.
The company operates a Liquefied Natural Gas
plant on Das Island in the Emirate of Abu Dhabi.
3. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Morocco & Egypt:SDX Energy provides operational update
Source: SDX Energy
SDX Energy, the North Africa focused oil and gas company, has provided a 2018 operational
outlook statement prior to Tuesday's site visit for sell-side and industry analysts in Morocco.
Morocco (75% Working Interest)
⢠Given continued drilling success, 2018 gross production is targeted to increase in line with
new customer tie-ins. Depending on timing of tie-ins, SDX is targeting gross production of
8-10mmscf/d of conventional natural gas by the end of 2018.
⢠SDXâs nine well Moroccan drilling programme continues in 2018, with the tie-in and testing
of the most recent discovery, ONZ-7, the drilling of two development wells (KSS-2 and
SAH-1) and the drilling of two exploration wells (LNB-1 and LMS-1).
⢠Including ONZ-7, the gross drilling cost for these wells inclusive of customer tie-ins, is
expected to be approx. US$13.0 million.
⢠In addition, SDX plans to shoot 240km2 of 3D seismic in its Rharb Centre concession at an
estimated cost of US$6.5 million.
Egypt - Meseda Concession (50% Working Interest/19.25% Economic Interest)
⢠2018 gross production guidance is increased to 3,800bopd.
⢠SDX plans to drill four wells in 2018. Two wells to develop the Rabul discoveries (Rabul-3
and Rabul-4) and two wells to maintain production in the wider Meseda area (Infill
Producer-1 and Infill Producer-2).
⢠The Company also aims to replace up to five ESPs in the wider Meseda area.
⢠Gross Meseda capex in 2018 is expected to be approx. US$6.0 million (SDX 50% share).
Egypt - North West Gemsa Concession (50% Working Interest)
⢠SDX intends to maintain gross 2018 production at 2017 levels, targeting 4,422boepd.
⢠To achieve this production it is planned to drill two wells (AASE-25 and AASE-27), and
undertake seven well workovers.
⢠The expected gross cost of the two wells including processing facility tie-ins is US$6.6
million with the seven workovers expected to cost gross US$1.7 million (SDX 50% share).
4. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Egypt - South Disouq Concession (55% Working Interest)
⢠Up to four wells planned in H1 2018 with estimated gross capex of approx. US$12.0 million
(SDX share 55%).
o Two exploration wells (Ibn Yunus-1X and Kelvin-1X)
o Two development wells (SD-4X and SD-3X).
⢠Upon success of SD-4X and SD-3X, SDX expects to complete construction of a 10km
pipeline to the regional gas grid, together with the SD-1X processing facility. Gross capex is
estimated at approx. US$15.0 million, subject to completion of tenders (SDX share 55%).
⢠Ibn Yunus-1X and Kelvin-1X are targeting up to 150bcf in separate structures from the
SD1X discovery. If successful, volumes will be tied back to the SD-1X processing facility
and flow through the 10km pipeline directly to the regional gas grid.
⢠Given the above, and assuming all necessary approvals are obtained, first gas is targeted
mid-2018, with approx. 50mmscf/d expected from three wells in the SD-1X discovery
structure. The gas price is still under negotiation.
⢠Annual gross opex, including processing facility rental cost, is predominantly fixed and
estimated at approx. US$6.0 million, subject to completion of tenders (SDX share 55%).
Cash and Working Capital
Q4 2017 Highlights
⢠Recovered approx. US$6 million from backdated Egyptian and Moroccan receivables.
⢠Paid approximately US$5 million of Moroccan drilling campaign costs.
⢠Reduced backdated payables by approx. US$6 million.
2018 Outlook
⢠In 2018, the Company will look to make further reductions in its backdated Egyptian
receivables balance.
⢠Commitment well in South Ramadan offshore concession (SDX share 12.75%) expected to
be drilled in 2018. SDX's share of the cost expected to be approx. US$3 million.
5. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Morocco: SDX Energy gas discovery at the ONZ-7 development
SDX Energy, the North Africa focused oil and gas company, has announced that a gas discovery
has been made at its ONZ-7 development well on the Sebou permit in Morocco.
The ONZ-7 well was drilled to a total depth of 1,167 meters with 5 meters of net conventional
natural gas pay in the Hoot formation. The well came in on prognosis but reservoir quality
exceeded initial expectations, encountering porosity in the pay section of 35.3%.
The well will now be completed, tested and connected to existing infrastructure. SDX expects to
provide a further update on testing results in early February.
6. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Bapco's $5 billion modernisation drive will be completed in 2022
Reuters/Hamad I Mohammed
The Bapco modernisation programme, estimated to cost a total of $5 billion, is on track for
completion in 2022, Oil Minister Shaikh Mohammed bin Khalifa Al Khalifa has said.
The minister said the $4.2bln engineering, procurement, construction and commissioning turnkey
contract was awarded last month to a joint venture led by TechnipFMC.
Addressing delegates today during the opening of the Middle East Refining Technology
Conference (MERTC) in the Ritz-Carlton, Bahrain, the minister said the $4.2bn engineering,
procurement, construction and commissioning turnkey contract was awarded last month to a joint
venture led by TechnipFMC.
The programme entails the expansion of the
capacity of the existing Sitra oil refinery from
267,000 up to 360,000 barrels per day besides
improving energy efficiency, valorisation of the
heavy part of the crude oil barrel (bottom of the
barrel), enhancing products slate and meeting
environmental compliance.
The minster also said Bahrain is looking for more
partners to develop the Bahrain oilfield, which
was exited by Mubadala and Occidental
Petroleum in 2016.
Residents are seen doing their evening walk near the petroleum pipelines as State-run
Bahrain Petroleum Co (Bapco) refinery is seen at the back, in Ma'ameer village, south of
Manama, Bahrain, August 22, 2017.
7. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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Oman:Pact inked to drive renewable energy development
Oman Observer
GlassPoint Solar, the leading supplier of solar energy to the oil and gas industry, has signed a
collaboration agreement with a host of partners to establish its corporate social responsibility
initiative, the âGlassPoint Innovation Spurâ.
The programme is set to contribute and sustainably drive innovation within Omanâs renewable
energy and water management sectors. The list of partners includes The Research Council
(TRC), Innovation Park Muscat (IPM), Public Authority for SME Development (Riyada) and
Sharakah.
An intensive full-cycle incubation programme, the âGlassPoint Innovation Spurâ will provide
aspiring Omani entrepreneurs with an integrated ecosystem of scientific, technical and business
support. The two-year programme will equip participants with valuable skill sets through coaching
and mentorship, as they transform their innovations into implementable businesses.
A robust screening, selection, and testing criteria is in place to ensure originality and economic
feasibility. Selected entrepreneurs will receive practical support to further develop their inventions
and establish businesses before being linked to investors.
Signing the agreement on behalf of GlassPoint was Ben Bierman, COO and Acting CEO:
âGlassPoint is committed to driving innovation for a sustainable Oman. That is why we are
launching the âGlassPoint Innovation Spurâ to act as a catalyst and create green businesses.
It transcends typical business-related programmes because it goes beyond conceptualisation and
training and focuses on knowledge-transfer. Thanks to the contributions of our partners, we are
able to offer a full-fledged mentorship and incubation programme that promises to hone the
business acumen of Omani entrepreneurs and help them grow their inventions into feasible and
sustainable businesses.â
8. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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Dr Hilal Ali Zaher al Hinai, Secretary-General of TRC, remarked: âThe Research Council
recognises the significant role of entrepreneurship promoting a culture of innovation and research
amongst Omanâs young talent. This is an initiative that stands out for its unequivocal focus on
transforming innovations into genuinely valuable and needed commercial products and services.â
Representing IPM at the signing ceremony was Dr AbdulBaqi Ali al
Khabouri, Director of Science Parks. He said: âThrough IPM, we
look forward to providing Omanâs ambitious, innovative and talented
entrepreneurs with the required tools to unlock their full potential and
ensure a sustainable and successful future for these fledgling
businesses.â
Signing for Riyada, was Khalid bin al Safi al Huraibi, the Acting Chief
Executive of Riyada. He said: âThere is certainly tremendous
entrepreneurial spirit in the Sultanate but bringing an innovation to
market and creating a sustainable business is a complicated
process.
Well-researched and thoroughly planned, this programme is a
rigorous, motivating and realistic preparation for the commercial
journey. Riyada is proud to lend its expertise to the participants and helping them take the
necessary right first steps to ensure a sustainable success of their innovations.â
The agreement was also signed by Abdullah al Jufaili, General-Manager of Sharakah. He
remarked: âSharakah is proud to partner in this programme in order to develop new innovative and
research-based renewable energy and water management start-ups in Oman. We are confident
that the foundation and direction this programme provides will equip Omanâs young eco-
entrepreneurs for both domestic and international success.â
An example to the Innovation Spur entrepreneurs, GlassPoint developed its own proprietary solar
technology thatâs been deployed on oilfields in California and the Middle East. Its unique
technology harnesses the sunâs free and renewable energy to produce steam for heavy oil
extraction.
9. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Russia may back Aramco IPO, enhance OPEC ties
Reuters - Dmitry Zhdannikov
Russian pension funds are considering investing in Saudi Arabian state oil major Aramco when it
lists its stock in a move to strengthen the partnership between the worldâs two top oil producers,
Russiaâs top state investment officer said.
The head of Russiaâs Direct Investment Fund, Kirill Dmitriev, told Reuters on Tuesday that
Moscow and Riyadh should be coordinating oil policies for many more years.
âWe see great interest in the Aramco IPO from Russian pension funds as well as from our
Chinese partners,â said Dmitriev, who two years ago was the first Russian official to suggest the
possibility of a joint oil output deal with OPEC.
He said he could not disclose the names of the funds or the amount they were prepared to invest.
Sources told Reuters last year Chinese state oil companies were willing to become cornerstone
investors in the Aramco IPO which could become the worldâs biggest, valuing the firm at up to $2
trillion and raising more than $100 billion.
âRussia already has significant positions in the oil business so it is hard to expect us taking a very
significant stake during the IPO,â Dmitriev said on the sidelines of the World Economic Forum in
Davos. He added that the deal would help strengthen growing cooperation with Riyadh.
Non-OPEC Russia and OPEC led by Saudi Arabia agreed to cut oil output by 1.8 million barrels
per day (bpd) or around 2 percent of global production throughout 2017 and 2018, in a move that
has helped oil prices to double from their 2016 lows to around $70 a barrel.
âExtending such cooperation for many more years would be very useful for the market. It has
proven its efficiency, when we were targeting balancing supply and demand rather than targeting
a particular oil price,â said Dmitriev.
OPEC has said it wanted global oil stocks to return to a five-year average and the groupâs officials
have said that target could be reached by the middle or end of 2018. But even when the target is
reached, OPEC has insisted it would exit from cuts gradually in order not to shock the market.
âFuture mechanisms of cooperation and concrete tools could differ,â said Dmitriev. He said oil
producers had generated an extra $600 billion in revenues thanks to oil cuts and higher prices
over the past year, which allowed them to resume investments and guarantee no supply
shortages in the future.
For Russia and Saudi Arabia the deal has also paved the way for dialogue on many other fronts
despite the two countries effectively fighting a proxy war in Syria. âThe deal has created elements
of trust in investments and in political cooperation. It did help political dialogue. It showed Russia
and Saudi Arabia can work together,â Dmitriev said.
âWithout the deal, a visit of the Saudi king to Russia wouldnât have been possible and wouldnât
have been that successful,â said Dmitriev, referring to King Salmanâs visit in October.
10. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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NewBase January 24 - 2018 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil dips on higher U.S. fuel stocks, but overall market remains supported
Reuters + NewBase + Bloomberg
Brent crude futures were at $69.79 a barrel at 0749 GMT, down 17 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $64.45 a barrel, down 2 cents from
their last settlement. Prices were pressured by U.S. data showing an increase in crude and
gasoline stocks.
The American Petroleum Institute said on Tuesday crude inventories rose by 4.8 million barrels in
the week to Jan. 19 to 416.2 million, after nine weeks of drawdowns. Gasoline stocks climbed by
4.1 million barrels, while refinery crude runs fell by 420,000 barrels per day.
In Asia, oversupply of gasoline has pulled down refinery profits their lowest level since 2015. Amid
these indicators, traders are taking measures to protect themselves from a potential fall in crude
prices.
Trading data shows open interest for Brent put options to sell at $70, $69 and $68 per barrel has
surged since the middle of last week on the Intercontinental Exchange (ICE).
Oil price special
coverage
11. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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WTIl Rally Pauses on Signs U.S. Crude Tanks Start to Fill Again
Futures were little changed in New York after advancing Tuesday to close at the highest level
since December 2014. Industry data signaled inventories rose by 4.76 million barrels last week,
which will be the first gain in 10 weeks if confirmed by a government report on Wednesday. The
Energy Information Administration is forecast to show supplies slid by 2 million barrels.
Oil has extended a two-year gain as the Organization of Petroleum Exporting Countries and its
allies trim output to reduce a global glut. While rising U.S. production is seen as a challenge to
those supply cuts, Qatarâs Energy Minister Mohammed Al Sada said the market can absorb shale
growth and will re-balance in the second half of 2018. The International Monetary Fund said the
global economy this year will expand at the fastest pace since 2011.
âThe market has been waiting for a pullback for a long time,â said Michael McCarthy, a chief
strategist at CMC Markets in Sydney. âThere seems to be a collective view that it may not arrive
and any break through recent highs could see a potential run to $72 for West Texas. Despite the
fact that U.S. production has come back toward record levels, it appears traders are focused more
on the increase in demand that weâre seeing.â
West Texas Intermediate for March delivery was at $64.49 a barrel on the New York Mercantile
Exchange, up 2 cents, at 7:45 a.m. in London. Total volume traded was about 11 percent below
the 100-day average. WTI closed at $64.47 on Tuesday after advancing for a second session.
See also: Big Oil Said to Plan Tenfold Expansion of Cost-Cut Collaboration
Brent for March settlement lost 13 cents to $69.83 a barrel on the London-based ICE Futures
Europe exchange after rising 1.4 percent on Tuesday. The global benchmark crude traded at a
premium of $5.35 to WTI.
12. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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STILL STRONG SUPPORT
Despite this, traders said oil would unlikely tumble far as markets remain supported by strong
economic growth and by supply restrictions led by the Organization of the Petroleum Exporting
Countries (OPEC) and Russia.
Russian Energy Minister Alexander Novak said on Wednesday that an average Brent price of
around $60 was a reasonable forecast for this year, Interfax news agency reported.
In the latest sign of healthy economic growth, Japanese manufacturing activity expanded at the
fastest pace in almost four years in January, a survey showed on Wednesday.
Economic growth is translating into oil demand growth and comes at a time that OPEC and
Russia lead production cuts aimed at tightening the market. The deal to withhold output started in
January last year and is currently set to last through 2018.
Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore said a
âbeaming economic forecast along with stout compliance from OPEC (to withhold production) is
providing convincing support.â
Futures in New York, which were rising closer to $65 a barrel in after-hours trading, plunged back
to the level where they settled on Tuesday, at $64.47. The American Petroleum Institute was said
to have reported domestic oil inventories increased 4.76 million barrels last week. That would be
the first build in stockpiles since November if data from the Energy Information Administration
confirms it on Wednesday.
Refiners are in the midst of maintenance with many plants planning to take down key process
units in February, further weakening their demand for oil.
The U.S. benchmark closed at the highest since 2014 during Tuesdayâs session amid
expectations of falling U.S. inventories and after assurances from Russian and Saudi Arabian oil
chiefs that a historic production accord by the worldâs largest producers will endure. BBL
Commodities LP, one of the worldâs largest oil-focused hedge funds, believes Brent futures, the
London-traded benchmark, will climb to $80 this year as stockpiles drop rapidly on OPECâs curbs.
Prices have been rallying toward to $65 a barrel in New York and $70 in London as the
Organization of Petroleum Exporting Countries and allied producers curb output for a second
straight year.
13. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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NewBase Special Coverage
News Agencies News Release January 24-2017
U.S. Solar Tariffs slow module sales & inflaming trade tensions
By Liam Denning
It is perhaps fitting that President Donald Trump's salvo of tariffs on solar-power equipment was
unleashed in a press release dropped late on Monday and sporting a headline that actually led
with "large residential washing machines."
Why? Because, digging into the impact, the tariffs help to demonstrate one thing: Solar modules --
blocks of cells that are put together to make panels -- might seem space-age, but, cost-wise,
they're a little more mundane. That, of course, is the whole point.
China's breathtaking expansion in making them has been the primary reason their price has
declined by 80 percent since 2010, crushing margins everywhere and helping to push many a
manufacturer elsewhere into bankruptcy. Yet the tariffs Trump has imposed look unlikely to
encourage solar-equipment factories to start sprouting across the U.S.
Duties on imported modules from non-exempt countries start at 30 percent in year one and fall by
5 percentage points each year until the final level of 15 percent. Here's Bloomberg New Energy
Finance's latest projections of the cost of solar modules in the U.S.:
Sundown
The cost of solar modules has fallen dramatically already
Source: Bloomberg New Energy Finance
Note: Average estimated and projected module cost for U.S. utility-scale tracking solar installation. Real 2017 U.S dollars.
On the face of it, therefore, if the tariffs kicked in this year, they would add about 10 cents to the
cost, taking it to 43 cents per watt.
Notice this would still be lower than in 2016 -- which also happened to be the biggest year ever for
U.S. solar installations, at 13.6 gigawatts.
14. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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That year's activity was given a boost by a different arm of the government, as project developers
rushed to start them ahead of a feared abolition of tax credits by Congress, which ultimately didn't
happen. Still, modules costing almost 50 cents a watt clearly were not a barrier.
Stopping the Clock
All else equal, the tariffs would keep imported module prices at levels prevailing in late 2016 and
through 2017
Source: Bloomberg New Energy Finance, Bloomberg Gadfly analysis
Note: Estimated average and projected cost of modules for utility-scale tracking solar installations. Real 2017 U.S. dollars.
15. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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publication. However, no warranty is given to the accuracy of its content. Page 15
Another thing to bear in mind is that the cost of a solar project involves many other elements, such
as inverters to make the current useful, design and construction, permitting and other elements.
Here, for example, is how the elements break down for a commercial and industrial installation:
Modular Costs
Modules are just one element of the cost of a solar-power project
Source: Bloomberg New Energy Finance
Note: Estimated and projected average cost breakdown for a U.S. commercial and industrial solar installation. Real
2017 U.S. dollars. "EPC" is engineering, procurement and construction.
Over time, the module's share of overall project costs has fallen significantly, for all three of the
main types of use:
Modular Mundanity
Modules have been declining as a part of the overall cost of solar projects of any type
Source: Bloomberg New Energy Finance
Note: Module's share of estimated and projected average cost of U.S. solar-installations by type.
Residential share rises after 2021 due to scheduled roll-off of investment tax credit.
16. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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The different levels there do mean, however, that the tariffs won't have the same effect on each
type of project. Using BNEF's projections, the cost of a residential installation would rise by about
3 percent on average over the four years of the duties, while commercial and industrial costs
would go up by 4.4 percent. Utility-scale projects would see a jump of almost 9 percent.
To be clear, in an industry as competitive as this, anything that messes with the continued decline
in costs will deter some sales. Given that manufacturing accounts for only about 15 percent of the
U.S. solar-power workforce, this seems not super-helpful for job creation.
However, it is tough to see how these tariffs stop the industry in its tracks, especially as
the impending sunset of the investment tax credit offers an incentive for developers to not delay
beyond this decade.
It is possible that, in disrupting sales and supply chains, the tariffs throw a structural wrench into
continued declines in unit costs, not just temporary ones. And the door to further tit-for-tat trade-
war escalations has been opened a bit wider -- with consequences that could spread way beyond
solar power, energy, and even washing machines.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
17. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
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Khaled Al Awadi is a UAE National with a total of 28 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. âEmaratâ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE
operations base , Most of the experience were spent as the Gas Operations
Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility &
gas compressor stations . Through the years, he has developed great
experiences in the designing & constructing of gas pipelines, gas metering &
regulating stations and in the engineering of supply routes. Many years were spent drafting, &
compiling gas transportation, operation & maintenance agreements along with many MOUs for the
local authorities. He has become a reference for many of the Oil & Gas Conferences held in the
UAE and Energy program broadcasted internationally, via GCC leading satellite Channels.
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NewBase January 2018 K. Al Awadi
18. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 18
19. Copyright Š 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi â Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 19
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