New base 546 special 23 February 2015

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,
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NewBase 23 February 2015 - Issue No. 546 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
ENEC wins major honour for ‘Building Risk Management
Capability’ At Global Risk Awards
The Emirates Nuclear Energy Corporation, ENEC, the organisation responsible for the
development and operation of the UAE’s peaceful nuclear energy programme, has won a major
award in the ‘Building Risk Management Capability’ category at the Institute of Risk
Management’s (IRM) 2015 Global Risk Awards.
Over 30 well-known organisations from all over the globe submitted entries to the category, and
ENEC was chosen as winner by the judging panel of more than 30 leading risk management
practitioners and academics.
ENEC’s entry, ‘Building Risk Management Capability,’ showcased how the corporation built a
rigorous risk management process that is a critical element in the culture of safety that ENEC
promotes. This world-class process included identifying and assessing potential strategic risks
that could affect the business’ organisational mission.
Mohamed Al Hammadi, CEO of Emirates Nuclear Energy Corporation, said, "This award is an
international recognition of the systematic approach that ENEC has to its risk management
processes and procedures. As a nuclear organisation, we use the industry’s principle of
continuous improvement to implement a proactive approach to risk management. We are proud of
this achievement and this win shows our commitment to the highest international standards for
safety, quality and risk management. It is a proud moment for the organisation and the team." IRM
is the world’s leading professional body for risk management and the Global Risk Awards provide
unique international recognition of excellence.
With a cross-continent judging panel, the Global Risk Awards represent the pinnacle of
achievement for risk professionals, teams and organisations from around the world. The 2014
awards saw over 200 nominations across all categories from Africa, Asia, Australasia, Americas,
Europe and the Middle East, from a huge variety of sectors and types of organisations.

Saudi: Largest soda ash, calcium chloride factory in MENA
region to be built in Yanbu
Saudi Gazette + NewBase
IDEA Soda Ash and Calcium Chloride Company (ISACC) has received approval from the Royal
Commission in Yanbu to allocate one million square meters of land for the project the company is
developing to build an industrial complex at Yanbu Industrial City.
The industrial complex will include a factory for the production of 300,000 tons of soda ash,
considered the first of its kind in the Gulf region and the largest in the Middle East and North Africa
(MENA) region. The complex also includes a calcium chloride plant that is considered the largest
in the Middle East and North Africa (MENA) region with an annual capacity of 300,000 tons.
The project will be owned and managed by InoChem (Khair Inorganic Chemical Industries Co.) –
a Saudi closed joint stock company under establishment. “This is one of the Kingdom’s strategic
projects to maximize investment in non-oil national resources and to diversify income sources and
reduce dependence on oil exports,” said Abdul Aziz Yahya Al-Muaiyyad, Managing Director and
Chief Executive Officer of ISACC.
He praised the continuous and effective support provided by the Royal Commission of Jubail and
Yanbu for all the projects in Yanbu Industrial City, which is not only limited to the provision of land,
but is also extended to the provision of all other industrial infrastructure and utilities, in cooperation
with Marafiq.

Al-Muaiyyad further said the allocated land is sufficient not only to meet current needs for the
production of soda ash and calcium chloride, but also takes in consideration the company’s
strategic growth master plan to meet the future growth of the regional demand.
Conservative market studies indicate that the demand for soda ash in the Middle East and North
Africa will reach 2.15 million tons annually by 2023, while demand for calcium chloride in the
Middle East and North Africa will reach some 722,000 tons annually by 2023.
He added “the project is also expected to contribute to the industry developments through
supplying its products to a number of downstream manufacturing projects, while committing to
strategic plans aimed at Saudization of workforce to up to 75 percent of total employees.” Al-
Muaiyyad highlighted that the project is currently on schedule, with all necessary infrastructure
and utilities allocated. These utilities include power, seawater for cooling, potable water, and
industrial wastewater systems.
ISACC announced previously that it had received approval from the Ministry of Petroleum and
Mineral Resources to renew the allocation of feedstock (industrial gas and heavy fuel) for the
project, marking an important step toward executing the project contracts.
InoChem is a Saudi investment being founded by IDEA International for Investment and
Development Company, MEDA Chemical Group, and a group of businessmen and major
investment companies.

With Solar Costs Falling, GCC Govts Should Speed Up Projects
GulfBusiness + NewBase
The GCC’s regional governments should speed up planned solar power projects since costs
have reduced, an energy expert has said. Cameron Kelly, legal counsel for the New Port
Project, pointed out the recent bid for Dubai’s solar power plant, which saw the world’s
lowest tariff of under 6 cents/kWh from a consortium led by Saudi’s ACWA, as an example.
“To get an idea about how aggressive this is, consider that the average of the 10 finalists’
bids was 9.35 cents/kWh, with the highest bidder being the Chinese Huaneng Power
International at 14.71 cents/kWh,” she said.
“In light of these results of the DEWA auction, existing, outdated roadmaps and assumptions
for the cost and complexity of procuring and installing solar that many of the GCC’s regional
governments have so far based their plans on will need to be revised; there is little excuse
now to further delay solar procurement programmes,” he added.
As part of its energy diversification goals for 2030, Dubai launched the Mohammed bin Rashid
Al Maktoum Solar Park in 2012. The park began with a 13MW solar PV plant in 2013 and
aims to generate 1,000 MW by mid-2017. Meanwhile the Qatar Solar Energy company
launched a solar-panel factory last year, which has the ability to generate 300mw of energy
annually. It plans to eventually produce 2.5GW of solar energy annually.
Other Gulf countries such as Saudi Arabia and Kuwait are also eyeing major solar power
projects to diversify their energy mix and capitalise on the sunny weather conditions in the
region. Speaking ahead of the Solar Middle East Conference, Kelly urged governments to
consider reverse auction mechanisms.
Under a reverse auction, the government invites competitive bids from (solar and other)
project developers to supply a specified amount of electricity from a certain renewable energy
technology over a predetermined period of time. The successful bidder offering the lowest
price per kilowatt or megawatt per hour is awarded a long-term power purchase agreement at
its winning bid.
“The key advantage involves achieving cost effectiveness. A well-designed reverse auction
can effectively bridge the gap between the current state of the market and the market for low
– emission technologies urgently required by the global community,” he explained.
“Reverse auctions drive product volume and installation, assist in delivering competitively
priced electricity and can provide a credible and secure financial return over the long term to
both developers and financiers. “Economies of scale will apply and the speed and flexibility of
renewable-energy deployment will be further increased through added competition,” he
added.

Egypt to Invite Bids for 8 Oil, Gas Blocks in Mediterranean Sea
NGA + NewBase
Egypt will soon auction eight oil and natural gas exploration blocks in the Mediterranean Sea,
country’s petroleum ministry announced Sunday.
The eight blocks up for auction are West Arish Marine, East Port Said Marine, North Rumana
Marine, North Ras al-Ash Marine, West al-Timsah Marine, South Taneen Marine, North Hammad
Marine, and East Alexandria Marine, the ministry said adding that they cover an area of 11,849 SKm
Egypt is looking to boost production of natural gas by attracting investment in the sector, mainly by
foreign firms. Country’s natural gas output has seen a declining trend in recent years primarily
because foreign firms have been reluctant to increase investment in exploration and production,
particularly in costly offshore areas, until the government repays their previous outstanding debt.
Since late last year, Cairo has also been clearing outstanding debt to energy firms. In last few
months the government has made payments to companies such as BG Group, Dana
Gas andCircle Oil Plc. To cater to the short term demand, Cairo has signed numerous gas supply
deals in recent months.

Is Silicon Valley the future of the US car?
AFP + NewBase
Is the future of the US car industry in Silicon Valley? After Tesla and Google, Apple appears to be
readying for a plunge into the industry long rooted far away in the steel belt of the US upper
Midwest.
According to various media reports, the maker of iPhones
and iPads has created a special unit named “Titan” with
hundreds of staff to begin developing an electric car, with
2020 the target date.
Apple remains silent on the project, but the reports were
partially backed up by a lawsuit filed against the tech
giant. Battery maker 123 Systems has accused Apple of
aggressively poaching its staff.
But it puts Apple in line with Tesla, the current champion
of the electric car, and Google, the online giant which is focused on the self-driving, also-electric
Google Car.
The Big Three US automakers — General Motors, Ford and Chrysler (now a part of Fiat Chrysler
Automobiles, FCA) — are taking the threat from the Detroit outsiders seriously.
“Given the company’s (Apple’s) tremendous capabilities, that is no surprise to anyone,” GM
spokesman Dan Flores said.
At Chrysler, spokesman Eric Maynes said: “We can’t comment on something we haven’t seen.”
Ford too had no comment on Apple’s plans, but the number two automaker recently opened a
research centre in Palo Alto, the heart of Silicon Valley, as it looks to the future of self-driving
automobiles.
Bill Visnic, an analyst at industry specialist Edmunds.com, said that given the seven-year average
time frame to develop and bring a car to the mass market, the Detroit giants are not under serious
pressure yet.
Even with the unexpected success of Tesla, for instance, the company still sold less than 35,000
cars last year in an national market of more than 16 million units. And Tesla’s cars are confined to
a very high-end niche market.
“Apple is not an immediate threat to the US auto industry. I don’t think you’ll see the volume there,
the number of cars won’t really begin to approach anything like Detroit is making right now at any
time soon,” said Visnic.
Alec Gutierrez, a market analyst at Kelley Blue Book, said Apple’s strength is its role as a
“disruptor” in industries, and that the “comprehensive ecosystem” of its popular consumer
electronics could be extended to an “Apple car”.
Apple has the money to put into a new car — some $180 billion in capital built up to invest in new
projects.Even so, said Gutierrez, given the costs and competition in the auto industry, “it’s fraught
with risk.”
“The automotive space is so highly competitive today, and margins in new car sales are
extraordinarily thin, which is something Apple is not used to. “How many companies have totally

failed into trying to enter the automotive industry? It’s a tough thing and it’s very expensive,”
added Brett Smith, Programme Director at the Centre for Automotive Research.
He pointed to Tesla continuing to lose
money despite its success in marketing
its luxury cars with battery systems
superior to any offered by Detroit. And the
major automakers are all working hard on
making more and better hybrid and all-
electric vehicles.
That sets a high bar for any new entrant,
notes Smith. “Does Apple have better
technologies than Mercedes or Ford or
GM or Toyota to build a car? I really
doubt it.”
What Apple could bring to the industry is what Google brings: ways to process and use data.
Google is focused not on the physical car itself but on the technology that will allow cars to run
themselves. Its self-driving vehicles, in the guise of various car models, have already driven
hundreds of thousands of miles on California roads in test runs.
Apple already has something to offer the industry, notes Visnic. It could become a key supplier of
connectivity technology for cars, putting its operating systems up against Google’s Android,
already being installed in many car models.
“For Apple, they have proven to be phenomenally good at user experience,” Smith said.
“The car for them will become another user experience device, and that will differentiate them.”

Romania:Chevron says plans to give up Romania shale gas
Source: Reuters via Yahoo! Finance
Chevron said it will give up shale gas exploration plans in Romania, after an assessment showed
the Black Sea state does not compete favourably with other investment opportunities. Energy
firms have been attracted by estimates of massive shale gas reserves in Poland and Romania.
Last month, the U.S. energy major took a similar decision to discontinue its operations in Poland.
'Chevron intends to pursue relinquishment of its interest in these (Romanian) concessions in
2015,' Kent Robertson of Chevron said in an email to Reuters. 'This is a business decision which
is a result of Chevron's overall assessment that this project in Romania does not currently
compete favourably with other investment opportunities in our global portfolio.'

US:Wind generates more than 10% of Texas electricity in 2014
Source: U.S. Energy Information Administration, based on the Electric Reliability Council of Texas (ERCOT)
In 2014, more than 10% of the electricity used in the grid covering most of Texas came from wind
generation, according to the grid's operator, the Electric Reliability Council of Texas (ERCOT).
Wind's share of the ERCOT generation mix grew from 6.2% in 2009 to 10.6% in 2014 as total
electricity generation increased over the same period by 11.3%. The growth in wind generation is
a result of new wind plants coming online and grid expansions that have allowed more wind power
to flow through the system to consumers.
Wind generation in ERCOT nearly doubled from 18.8 million megawatthours (MWh) in 2009 to
36.1 million MWh in 2014. Wind capacity has also grown substantially over the past six years
(and much more so in the years before that), but wind generation grew at a faster pace, partly
because transmission constraints that previously prevented wind generators from operating at
their maximum capability were gradually removed through a state-directed transmission
expansion program. As these transmission constraints were removed, more generation from wind
plants (largely concentrated in the northwestern part of the state) could reach the state's
population centers. The result has been a faster increase in wind generation than in wind capacity
from 2009 to 2014.

Wind's contribution to ERCOT generation is not evenly distributed throughout the year. In Texas,
peak wind season occurs during the spring—March to June—before significantly dropping off
during the summer—July to September.
Based on data for the past six years, the four months from March through June account for on
average about 40% of annual wind generation in ERCOT. The graph on the right below shows a
fairly consistent seasonal pattern from year to year, despite the difference in actual volumes of
generation.

Oil Price Drop Special Coverage
OPEC should partner with other producers to support oil prices (expert)
APS
ALGIERS-OPEC should consider new "alliances" with other producing countries to
support crude oil prices, oil expert Pierre Terzian said Sunday in Algiers, citing the
Algerian initiative based on consultation and dialogue to restore balance of the market.
To raise prices, "OPEC should consider expanding alliances (with other producers). This is what is
being done now. Some members of the organization, including Algeria, are working for expanding
the circle of alliances," said Terzian at a conference on the ins and outs of the current oil crisis.
He said OPEC, which has lost its balance of power, is no longer able to stabilize the world oil
market without the contribution of other producing countries.
Therefore, Terzian added that OPEC, given the abundant supply of crude oil, is not completely
able to weigh on markets as it did in the past when there was a scarcity of oil.
"We are no longer in a situation of post-oil but rather in that of the post-oil OPEC", considered the
expert who is also CEO of Pétrostratégie, a consulting energy firm, at the conference organized
by Sonatrach.
The same expert, who gave his opinion on the causes of the current oil crisis, considered that
Saudi Arabia caused this collapse in prices by reducing the prices of its crude intended for Asian
markets under the pretext of protecting the profit margin of refiners.
As for the opportunity for Algeria to use shale gas, CEO of Pétrostratégie argued that the debate
on this subject should be "rational" and conducted by scientists.

LNG shipping rates fall to lowest since 2010
Bloomberg + NewBase
The cost to ship super-chilled natural gas has tumbled to the lowest level in more than four years
and is forecast to fall further. That’s good news for buyers and sellers of the fuel.
Rates to transport liquefied natural gas have declined to about $50,000 per day and will probably
go lower before recovering, according to Andrew Buckland, a London-based analyst at Wood
Mackenzie Ltd. That compares with more than $140,000 a day in 2012, the energy consulting firm
found in a report last month.
Lower rates can benefit traders that sign short-term contracts and give LNG players flexibility in
where they deliver the gas, said Hal Miller, president of consulting company Galway Group in
Houston. At the same time, ship owners will be hurt by falling rates.
“I’d expect prices to stay in this ballpark for a couple of years before they start turning around” as
new LNG projects begin shipments, Miller said by phone. Trafigura Beheer late last year expected
to more than double its LNG trading for 2014, helped by lower freight rates and increased
volatility. Vitol said in November that it remains the “main player” of the fuel as companies
including Glencore, Gunvor Group and Noble Group entered the market or expanded.
Prices have dropped amid rising numbers of LNG vessels, which transport gas that has been
cooled and condensed to liquid form at about minus 160 degrees Celsius (minus 260 Fahrenheit).
The prospect of significant US LNG exports drove ship orders to a record high of 67 last year,
while rapidly rising rates in 2011 after the nuclear crisis in Japan spurred speculative orders,
according to Wood Mackenzie.
LNG ships ordered three or four years ago have struggled to find work and compete with newer,
larger and more fuel-efficient vessels, Buckland said. That has pushed rates to the lowest since
late 2010, he said.
The market could stay depressed until the middle of next year with rates potentially sinking to
$40,000 a day with too many vessels, said Tatsuo Osakabe, the Tokyo-based managing director
of Fearnleys Japan, a shipping broker. Owners who ordered ships speculatively “based on spot
market price and sentiment” will lose from the lower rates, he said.
“Once the US projects start up and their cargoes move into Asia, it could help the market pick up,”
Osakabe said, adding that rates could return to $100,000 a day if demand surges.
Prices of the fuel in Asia have dropped along with shipping rates as supply grows and oil tumbles,
and are poised to average below $10 per million British thermal units in 2015 for the first time in
four years.
Transporting the gas in liquid form to Asia could represent about 20% of the total costs of a US
export development, Galway’s Miller said. “Shipping is a big component of the cost structure, so
to the extent that you can drive that down really makes a difference,” Miller said. If “shipping costs
can be reduced it just makes US LNG much more competitive,” he said.

Hedge Funds Raise Bullish Oil Bets as Drillers Idle Rigs
(Bloomberg
Speculators raised bullish oil bets for the first time in five weeks as producers curbed new drilling.
Hedge funds and other money managers increased net-long positions in West Texas Intermediate
crude by 2.7 percent in the week ended Feb. 17, U.S. Commodity Futures Trading Commission
data show.
Futures rose 7 percent in the report week as companies including Total SA and Apache Corp.
said they would cut spending and drill less. The number of oil rigs in the U.S. tumbled 35 percent
since Dec. 5 to the fewest since 2011, according to Baker Hughes Inc. Outlays for exploration and
production will drop by more than $116 billion in 2015, Cowen & Co. estimates.
“People are starting to realize that all the slashing of budgets, the layoffs and the declining rig
counts are going to have an impact,” said Phil Flynn, a senior market analyst at the Price Futures
Group in Chicago. “The debate is whether the bottom is in or not, and a lot more hedge funds are
betting that it probably is.”
WTI futures rose $3.51 to $53.53 a barrel on the New York Mercantile Exchange in the week
covered by the report. The contract for April delivery added 13 cents to $50.94 a barrel in

electronic trading at 12:33 p.m. Singapore time. Prices have slipped by more than half from last
year’s high in June.
Drilling Cutbacks
More than 30,000 worker dismissals have been announced across the industry as companies trim
budgets, according to data compiled by Bloomberg News. Oil explorers idled rigs for the 11th
straight week, reducing them by 37 to 1,019, Baker Hughes said Feb. 20.
“We have had some cuts in capital spending and a fairly dramatic drop in the drilling rig count,
which does point in the direction of rebalancing over the intermediate or longer term,” Tim Evans,
an energy analyst at Citi Futures Perspective in New York, said by phone Feb. 20.
U.S. crude output rose to 9.28 million barrels a day the week of Feb. 13, the highest weekly level
on record in Energy Information Administration data going back to 1983. U.S. output will increase
7.8 percent to 9.3 million barrels a day this year, the most since 1972, the EIA estimates.
Net-long speculative positions in WTI rose by 5,462 to 209,158 futures and options in the week
ended Feb. 17, according to the CFTC. Long positions increased by 2.6 percent to 309,624, while
short bets gained 2.5 percent to 100,466.
‘Tortured’ Diesel
In other markets, net bearish wagers on U.S. ultra low sulfur diesel plunged 38 percent to 20,278
contracts as the fuel gained 7.9 percent to $1.9774 a gallon in the report week.
There were still 56,407 speculative short bets on diesel on Feb. 17. Since then prices jumped 6.8
percent to settle at $2.1118 on Feb. 20 as cold weather in the eastern U.S. drove up demand just
as refinery outages in Pennsylvania and New Jersey curtailed supplies.
“Heating-oil money managers did not want to be as short ahead of the cold snap as they had
been,” Evans said. “Others are still being tortured by the swing in prices.” Net-bullish bets on
gasoline fell 18 percent to 44,383 as futures rose 2.4 percent to $1.5901 a gallon on Nymex.
Regular gasoline at U.S. pumps climbed 0.4 cent to average $2.28 a gallon Feb. 20, the highest
since Dec. 28, according to Heathrow, Florida-based AAA, the country’s largest motoring group.
Natural Gas
Net short wagers on U.S. natural gas fell 5.2 percent to 43,947. The measure includes an index of
four contracts adjusted to futures equivalents: Nymex natural gas futures, Nymex Henry Hub
Swap Futures, Nymex ClearPort Henry Hub Penultimate Swaps and the ICE Futures U.S. Henry
Hub contract. Nymex natural gas rose 3.1 percent to $2.759 per million British thermal units in the
week covered by the report.
EOG Resources Inc., the largest shale oil producer in the U.S., said it plans to reduce spending
40 percent this year and trim the number of completed wells by almost half compared with 2014.
EOG increased its oil output by about 50 percent annually since 2009.
“There seems to be this entrenched long position,” Andrew Lebow, senior vice president at
Jefferies Bache LLC in New York, said by phone Feb. 20. “It’s not getting shook out because of
the optimism going forward that the U.S. market will improve if production starts to decline.”

NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
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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 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 23 February 2015 K. Al Awadi

New base 546 special 23 February 2015

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New base 546 special 23 February 2015