Access Infra to launch solar plant in Uganda

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NewBase 10 June 2015 - Issue No. 623 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: Access Infra to launch solar plant in Uganda this year
By Reuters + NewBase
Access Infra Africa, a Dubai-based company, will launch what it says will be Africa’s largest
privately-owned solar plant in Uganda this year, part of plans to develop electricity projects in
17 African countries, mainly based on renewable energy.
The company will spend $500 million in the next three years on power generation plants,
including in Egypt, Ghana, Uganda, Tanzania, Kenya and Mozambique, Reda el-Chaar,
executive chairman of Access Power MEA, the majority owner of Access Infra Africa, said on
Tuesday.
“Solar power is no longer an exotic power solution, it’s becoming a real contender in any
(power) generation mix,” Char said. “As far as power technology is concerned, solar power
has made the biggest leap in the cost efficiencies in recent years.”
About 620 million people in sub-Saharan Africa, two thirds of the population, lack access to
electricity, an International Energy Agency report estimated last October, predicting its energy
demands would increase by 80 percent by 2040.
The region’s power generation capacity will quadruple, the IEA forecast, with renewable
energy accounting for about 45 per cent.Char said that by 2018, the company’s portfolio
would generate nearly 1 gigawatt of electricity, about enough energy for 700,000 homes.
In Uganda, Access Infra Africa’s 10-megawatt solar and wind power station will start
generating electricity later this year, the first of its plants to become operational. “This will be
the largest privately-owned solar power plant in Africa,” Chaar said.

Two institutions, FMO, the Netherlands’ development bank and London-based Emerging
Africa Infrastructure Fund, provided debt funding for 70-80 percent of the project’s costs, with
Access Infra Africa committing the remainder in equity. French energy group EREN
Développement has a shareholding in Access Infra Africa.
Access Infra Africa will own and operate the plant for 20 years, selling power to Uganda’s
national grid, while capacity may be increased to 40 megawatts, Chaar said. In 2016, Access
will also launch a 50-megawatt solar and heavy fuel oil hybrid plant in Benin and a 200-
megawatt solar and wind plant in Egypt.
“We hope to become profitable in next three years, our target is to deploy $500 million of
investments into a variety of assets,” Chaar said. “We would like more than three-quarters of
our portfolio in monetary value being renewables.” “The vision is for Access Power to become
a developer, owner and operator of power assets and to become a pan-African private utility,”

UAE: RWE talks with UAE investor over renewable projects
Reuters + NewBase
Talks between RWE and an unnamed Abu Dhabi investor are focused on joint renewable energy
projects in the Gulf region and are not about the sale of a stake in the German utility, its chief
executive said on Tuesday.
RWE, under pressure from shareholders to tap new growth areas, said in March it was in talks
with a Gulf-based investor about several forms of cooperation, adding nothing could be excluded
in terms of outcomes.
Asked whether talks were about a stake purchase, RWE chief executive Peter Terium said: "No,
it's about projects in the region," pointing to solar, wind, networks and wholesale markets as
potential areas.
"That, of course, takes time and then it's about the question how they will be financed," he told
Reuters on the sidelines of an economic conference in Berlin. Terium said that potential projects
would initially take off in the United Arab Emirates, adding that other markets could not be ruled
out. He confirmed that talks could still see the investor, which he declined to identify, take a stake
in RWE.
"Nothing can be ruled out in our business," Terium said. Europe's utilities are grappling with a
fundamental shift in their industry marked by a surge in renewables at the expense of
conventional power sources, such as coal and gas.
Shares in the 117-year-old RWE, now saddled with some 27.7 billion euros ($31.2 billion) of net
debt, are down a third so far this year and more than 80 per cent since 2007, wiping more than 40
billion euros off its market value.
RWE already has a foothold in the Gulf after forming a joint venture with state-run utility Dubai
Electricity & Water Authority (DEWA) in 2012 to provide consulting services to investors, energy
suppliers and governments.
Last year, the group won a contract to help Dubai set up an energy agency, whose aim is to boost
growth in the emirate via energy efficiency measures. Dubai, where energy demand grows by
about 5 per cent per year compared with a stagnant Europe, in January more than doubled its
target for renewables in its overall energy mix given the falling cost of solar power.

Bahrain: New Tatweer facilities to boost EOR production
TradeArabia News Service
Two of Tatweer Petroleum’s newest facilities located in the Bahrain Field were officially
inaugurated by Energy Minister
and company chairman Dr
Abdulhussain Mirza.
Dr Mirza, accompanied by
members of the Tatweer board,
officials from the National Oil
and Gas Authority, Bapco,
Banagas and Tatweer
Petroleum Management
inaugurated Tatweer’s new
compression stations as well as
its new pump repair shop during
a tour of the facilities, said a
report in the Gulf Daily News
(GDN), our sister publication.
The minister praised Tatweer for completing these company milestones ahead of schedule and
commended them on their efforts. “Tatweer Petroleum’s vision of becoming the leader of
sustainable growth is evident in the major strides the company continuously takes,” Dr Mirza said.
“These new facilities are examples of Tatweer’s efficient and streamlined organisation and of its
continuing contribution to the economic growth of the kingdom. “The new compression facilities
will further help to conserve the kingdom’s natural gas as well as allow more oil to be produced
from the Bahrain Field,” he said.
Tatweer Petroleum’s compression stations were commissioned in the second quarter of this year.
The 24 new compressors are designed to handle the excess associated gas in the Bahrain Field.
This excess gas is re-injected back into the oil reservoir in order to maintain the pressure of the
reservoir as well as to conserve the kingdom’s gas and in doing this it allows Tatweer to increase
its oil production.
The pump repair workshop is a fully equipped modern facility that allows Tatweer Petroleum
engineers to rebuild its failed downhole beam pumps without the need to ship them to external
repair agencies.
This provided a more economical solution and much faster turnaround of the repairs and helps to
better meet production requirements. Tatweer Petroleum utilises the latest enhanced oil recovery
technologies to implement its mission to develop the Bahrain Field to maximise stakeholders’
value and contribute to the growth of Bahrain’s economy.
This will support the vision of Tatweer Petroleum to boost the kingdom’s economic growth and
social prosperity. In December 2009, Tatweer Petroleum assumed responsibility for the
stewardship and redevelopment of the Bahrain Field.

Egypt to Receive Australian LNG today
Egypt will receive its first shipment of Australian LNG on Wednesday, according to a report by
Reuters. The 159,760-cubic-metre cargo aboard the Woodside Rogers was loaded at the port of
Dampier, which serves as the loading point for two LNG export plants, Pluto and North West
Shelf, both operated
by Woodside Petroleum.
The North African nation
has inked multiple LNG
deals to meet its short term
gas demand.
Along with Noble Group
and Sonatrach, Egypt has
signed LNG imports deals
with Trafigura, Vitol and
Gazprom.
In total EGAS has signed
agreements to import 90
LNG shipments, 49 of
which are going to be
delivered in 2015 and 2016, Petroleum Ministry said earlier this year. The Egyptian economy is
facing severe gas shortage as local demand has ballooned in recent years amid declining
domestic production. For the short term, the government is trying to source LNG from various
sources to cater to growing demand.
Also, the government is looking to encourage foreign energy firms to boost investment in local
hydrocarbon sector.
The government is working hard to tackle the worst energy crisis that the country has faced over
the past few years. Rolling power cuts in the summer have become routine since the January 25
Revolution in 2011, caused by fuel shortfalls at power plants, and increasing demand.
Egypt recently signed a deal with Algerian state-owned energy company Sonatrach to import six
LNG shipments during 2015. Also, Egypt reached an initial agreement with Russia’s Gazprom last
April to import seven shipments of LNG. It is expected to complete the agreement later this month.
As the summer approaches, the government is stepping up efforts to procure energy for running
power plants. The government signed a deal with Trafigura to import 33 LNG shipments during
2014-2015, added the statement.

Saudi Arabia higher oil output driven by market demand
Saudi Gazette + NewBase
Saudi Arabia's oil ministry said on Tuesday the rise in its oil production over the past three months
was a result of increased global demand and the needs of its customers and was not designed to
compensate for lower oil prices.
An official source at the ministry also said its petroleum policy did not reflect personal views and
were formulated by an integrated team of experts and specialists in oil market economics, based
at the ministry’s offices in Riyadh.
"It is done in coordination with oil-producing countries, especially OPEC countries, so as to serve
the Kingdom’s interests in the short and medium terms. It is also reviewed by the country’s senior
leadership. The integrated team of experts and advisers supports the decision makers," the official
said in a statement from the ministry.
The source said the statement was issued after the Wall Street Journal published a story last
week about the kingdom's oil policies, which the ministry said it considered inaccurate. Oil prices
rallied on Tuesday, aided by hopes of Chinese stimulus, helping to offset concerns about high
supplies, traders said.
US benchmark West Texas Intermediate for delivery in July jumped $1.04 to $59.18 a barrel
compared with Monday's close. Brent North Sea crude for July won $1.52 to $64.21 a barrel in
London midday deals.
Chinese inflation fell to 1.2 percent in May, data showed Tuesday, the latest sign that growth in
the world's number two economy is stalling and suggesting more monetary easing may be on the
way. Oil prices had fallen on Monday as the market weighed last week's OPEC meeting and the
prospects for a breakthrough in upcoming nuclear talks with major oil producer Iran.
Meanwhile, Saudi Aramco bought more than 1 million barrels of gasoil for July in the spot market
despite new refining capacity, as hot summer weather boosts power demand for air conditioning,
industry sources said.
Saudi Aramco Products Trading Company (ATC), a wholly-owned unit of oil producer Saudi
Aramco, bought about 1.1 million barrels of gasoil for delivery in July, about 30 percent less than
the company had initially sought.
ATC had sought four cargoes totaling 1.6 million barrels for delivery into Jizan, Dhuba, Jeddah
and Ras Tanura. The company bought the cargoes from Indian and Middle East refiners, including
India's Reliance Industries, one source said.
It likely paid a premium of about $1.70 a barrel above Middle East quotes for some of the gasoil
cargoes bought from Reliance, the source added. ATC could have paid higher premiums of
between $2.50 and $2.70 a barrel for other gasoil cargoes, a Singapore-based trader said,
although this could not be confirmed.
Saudi Aramco last bought gasoil cargoes for delivery in June from Reliance, BB Energy, Shell and
Total at premiums of about $1.70 to $1.90 a barrel above Middle East quotes, sources have said.

Saudi real GDP to grow 3.4% in 2015
Saudi Arabia will face a moderate business cycle during 2015 and 2016, growing around 3% in
real terms, the National Commercial Bank said in its “Saudi Economic Perspectives 2015-2016”
report themed
“Tackling Challenges
on Solid Ground”.
The report said the
assumption centers
on lesser contribution
from the oil sector
and moderation in
the non-oil sector.
“We project real GDP
growth of 3.4% for
2015 due mainly to
the non-oil sector maintaining last year’s pace of around 5%. The series of royal decrees
announced in January and April 2014 will provide favorable stimulus to the non-oil private sector,
with the construction and retail sectors the key beneficiaries, especially from the bonus payment
of two salaries to all public sector employees,” the report said.
Last year, the economy grew for the fifth year in a row, with the Kingdom's annual growth rate of
real GDP registering 3.6%. Nevertheless, economic growth in nominal terms at 1.09% was lower
than 2013, on the back of marginally lower oil prices. By the end of 2014, the Arabian light
average spot prices registered $97.2/bbl, an 8.6% decline compared to 2013.
However, the insignificant real growth in the oil sector at 1.72% was offset by the non-oil private
sector that grew by around 5.7%. The private sector had increased its contribution to real GDP to
around 39.5%, which illustrates the growing role that private enterprises are assuming in the
Saudi economy.
The main drivers of private sector growth were construction, manufacturing, and trade that grew
by 6.70%, 6.54%, and 5.97% respectively. There is little doubt that oil markets are currently
oversupplied, with demand dynamics and supply factors suppressing oil prices, a scenario that is
expected to persist in the remainder of 1H 2014.
Yet, the unraveling shale model and OPEC’s June meeting will be instrumental in shaping the
landscape of oil markets during the second half of the year. “We do believe that the market will
balance as US crude production inflects to the downside, breaking the anomaly of lower rigs and
higher production, as the shale oil business model faces tough economic realities. Hence, we see
Arabian light prices protected at a floor of $50/bbl and on average to settle at $65/bbl in 2015.
According to our estimates, Saudi crude oil production is expected to rise by an average of only
100 thousand b/d, reaching 9.8 MMBD.
“The demand for oil will continue to be hampered by global economic growth that continues to be
revised downwards, with the IMF in January reducing its forecast for global growth in 2015 to
3.5%, down from an October prediction of 3.8%. Notably, this was the third revision downwards by
the IMF since January 2014, underscoring the headwinds facing the global economy.”

Besides, “the weak and uneven economic recovery of the eurozone will remain a hanging cloud
on world markets, with the Greek debt crisis far from over and deflation lurking in the background.
Despite the sharp decline in prices since June, demand has not edged higher, with the IEA
predicting just tentative signs of recovery, with global oil demand growth expected to register 1
MMBD in 2015,” NCB said in the report.
Moreover, monetary policy in Saudi Arabia is exhibiting a high degree of stability and predictability
compared to most emerging markets that suffer from structural deficiencies, which entangled their
monetary policy in a balancing act between supporting economic growth and defending currencies.
SAMA is mainly concerned these days with price stability and money supply dynamics. On a
medium-term note, with the Fed expected to raise its target funds rate by the end of the year and
gradually thereafter, SAMA will follow suit by increasing the repo and reverse repo rates for the
first time since 2009, NCB said in the report.
Further, the weaker prospects for most advanced economies and export-dependent emerging
markets will act as
headwinds that could
potentially drive global
growth projections lower.
Downside risks emanating
from Chinese economic
slowdown, disinflation/
deflation, geopolitical risks
in Ukraine and the Middle
East as well as Greece’s
debt debacle will remain
key themes in 2015, the
report noted.

Qatar buys $1.2 bn HK Electric stake from Li Ka-shing’s firms
Reuters + NewBase
Qatar Investment Authority has bought an aggregate stake of 19.9 percent in HK Electric
Investments Ltd from billionaire Li Ka-shing’s firms for HK$9.25 billion ($1.19 billion), as the
global investor seeks investment opportunities in Asia.
Power Assets Holdings Ltd said it sold a stake worth HK$7.68 billion ($990.79 million) in HK
Electric to Qatar Investment Authority, as the Hong Kong power utility eyes new acquisitions
in the global energy industry.
Power Assets said its holding in HK Electric fell to 33.37 per cent after it sold a 16.53 per cent
stake, remaining as the controlling shareholder of the power supplier. Together with a stake
of 3.37 per cent bought from Cheung Kong Infrastructure Holdings Ltd, Qatar’s sovereign
wealth fund holds a stake of 19.9 per cent in HK Electric, Power Assets said in a separate
statement.
Power Assets said the latest sale was consistent with its intent of maintaining its stake in HK
Electric at between 30 per cent and 49.9 per cent. “We expect this new partnership to be of
potential significant benefit to our group,” said chairman Canning Fok, adding the net
proceeds from the deal would further strengthen Power Assets’ liquidity position.
A HK$455 million loss will be recorded as a result of the deal, led by the difference between
the net proceeds and the carrying value of the stake, the company said in a filing to the Hong
Kong stock exchange. It said the carrying value included the post-listing profit upon the listing
of HK Electric in January 2014.
Qatar has sought opportunities in Hong Kong, with investments in department store operator
Lifestyle International and commercial bank Agricultural Bank of China. Shares of Power
Assets fell 4.1 per cent to an 8-month low of HK$68.2. The stock ended down 2.2 per cent at
HK$69.55, deeper than a fall of 1.2 per cent in the benchmark Hang Seng Index .

Norway: Statoil announces third gas discovery in the Aasta
Hansteen area in three months Source: Statoil
Statoil and PL602 partners have made a gas discovery in the Gymir Prospect. With three
discoveries in a row, an important progress has been made in unlocking full potential of
the Aasta Hansteen area.
'Our 2015 exploration campaign
around Aasta Hansteenhas proven an
upside potential in the area. The
estimated total volumes in the three
discoveries, Snefrid Nord, Roald
Rygg and Gymir, amount to 75-120
million barrels of recoverable oil
equivalent, corresponding to about 1/3 of
the Aasta Hansteen recoverable volumes.
The discoveries will now be further
evaluated for future tie-in to the Aasta
Hansteen facilities in order to optimise
utilisation of the infrastructure and prolong
the production plateau,” says Dan
Tuppen, vice president exploration
Norwegian and Barents Sea in Statoil.
The well 6706/11-2, drilled by the
Transocean Spitsbergen rig in the Gymir
prospect, proved a gross 70-metre gas
column in the Nise Formation with good
reservoir qualities. Statoil estimates the volumes in Gymir to be in the range of 6-19 million
barrels of recoverable oil equivalent. Gymir is located just 8 kms away from Roald Rygg and 14
kms away from Snefrid Nord.
Aasta Hansteen will be the largest SPAR platform in the world and is the biggest ongoing field
development project in the Norwegian Sea. It is one of the main projects in Statoil’s portfolio. The
plan for development and operations (PDO) was approved by the Norwegian Ministry of
Petroleum and Energy in 2013. Production start-up is expected in 2017.
'Additional reserves from the three discoveries tied in to Aasta Hansteen will be important for
increasing the value of the Aasta Hansteen investment,' says Torolf Christensen, Statoil vice
president for the Aasta Hansteen project.
The drilling operations in all three wells have been extremely efficient, making them the fastest
deep-water wells ever drilled on the Norwegian continental shelf. The Gymir well has been
completed in just 13 days, which is a unique drilling performance for a deep water well.
'The total savings achieved in the three wells amount to 50 days or 360 MNOK compared to the
initial plan. This is a result of STEP (Statoil technical efficiency programme) within drilling and
well, and the ability of the onshore planning team and the Transocean Spitsbergen crew to take
out the full potential of the drilling process. The efficiency gains were achieved while keeping
high HSE standards,' says Thor Emil Bensvik, head of Statoil exploration drilling operations on
the NCS.

Sri Lanka to Commercialise Mannar Basin Gas Deposits
Sri Lanka will float international tender in October to commercialise gas deposits discovered in
Mannar basin, country’s power and energy minister Patali Champika Ranawaka said Monday,
reported news portal Colombopage.He further said that measures are being taken to tap two of
the gas deposits known as Dorado and Barracuda in the Mannar Basin.
In 2013, Cairn India discovered two successive
gas and condensate deposits in the Dorado
and Barracuda wells in the Mannar basin.
However, early this year the company quit
operations in Sri Lanka due to decline in oil
prices.
According to Ranawaka, Colombo is keen on
commercializing the natural gas deposits found
by Cairn and have included it in the new 10-
year national energy
plan, Colombopage reported.
In 2007, the government gave one Mannar
block each to India and China, but neither has
drilled. The remaining five blocks are to be
awarded by tender.
“We are optimistic that this will be commercially
successful,” petroleum industries minister Susil
Premajayantha told Reuters. “Now with this
discovery, we can get good competition and
offers for the remaining five blocks when we go
for tendering.”
Interest in the blocks has grown, but most operators have been happy to let Cairn try its luck
before making any commitments while the government smooths an erratic oil and gas regulatory
regime, diplomats following the exploration in Sri Lanka have told Reuters.
It is unclear whether the find will affect terms of a deal by London-listed miner Vedanta Resources
to take a majority stake in Cairn India. Sri Lanka’s government has said seismic data shows the
potential for more than 1 billion barrels of oil under the sea in a 30,000 sq km area of the Mannar
Basin, off the island’s north western coast.
Sri Lanka produces no oil and is dependent on imports, which cost it $3 billion in 2009. Since the
end of a 25-year war with Tamil separatists two years ago, the government has tried to
reinvigorate oil and gas exploration. American and Russian companies from the mid-1960s to
1984 explored the Cauvery Basin off the northern shore, but only traces were found and no
commercial oil was produced.
Violence onshore from Sri Lanka’s civil war with the Tamil Tigers ended offshore exploration
there. There are nearly 30 operating wells on the Indian side of the Cauvery Basin, and Calgary-
based Bengal Energy Ltd. has exploration rights for 1,362 sq km there. Sri Lanka is hopeful that
success will be reflected on its side of the field. There is also speculation that Sri Lanka’s eastern
coastal shelf has major oil and gas potential, but there is no seismic data yet to back it up.

Oil Price Drop Special Coverage
Oil prices rise on U.S. stock draw & improved global demand
Reuters + NewBase
Oil prices rose today as U.S. inventories were set to drop further and after the Energy Information
Administration (EIA) raised its 2015 oil demand growth forecast. Front-month U.S. crude CLc1
rose by a dollar to $61.14 a barrel at 0150 ET, before dipping to $61.03 by 0202 ET. Brent futures
LCOc1 were up 68 cents at $65.56 a barrel.
The gains came after prices for crude oil, gasoline and diesel jumped more than 3 percent on
Tuesday as bullish investors made bets across the oil complex for another weekly fall in U.S.
stockpiles. The U.S. government's EIA will issue official inventory data today, Wednesday.
Industry group American Petroleum Institute (API) estimated a draw of around four times the 1.7
million barrels seen in a Reuters poll of five analysts. "Since we expect further drops in the
inventory figure, we expect some upward movements ahead," said Singapore-based Phillip
Futures said on Wednesday.
On the demand side, the EIA raised its 2015 world oil demand growth forecast by 20,000 barrels
per day to 1.25 million bpd. Despite the rallies this week, analysts said that big further gains were
unlikely due to continued oversupply.
Saudi Arabia, the world's top crude exporter, will supply full contracted volumes of crude oil to at
least two Asian term buyers in July, unchanged from June, following OPEC's decision to maintain
its production target, industry sources familiar with the matter said on Wednesday.
The OPEC kingpin has supplied full contractual volumes to most Asian buyers since late 2009,
implying that the Saudis still want to defend market share via high volumes rather than prop up
prices through supply cuts.
In Japan, Asia's second biggest economy, crude runs dropped 0.31 barrels per day (bpd) in the
week to June 6 to 2.56 million bpd, and crude stocks were up 6.74 million barrels at 99.62 million
barrels.

Disappearing Bakken oil discount adds to output slowdown signsNEW YORK | BY CATHERINE NGAI
Oil traders scrambling to secure crude in the U.S. Midwest have pushed North Dakota's Bakken to
a near premium for the first time in two years, a rally stoked by record refinery runs and an
unprecedented slump in Canadian imports.
Yet some traders say the surprising strength emerging from opaque physical crude markets in the
heartland of the fracking boom also points to a more important, lasting factor: declining production
of Bakken crude, a long-anticipated but as yet unproven twist in the shale revolution.
The buying frenzy pushed Bakken
delivered at Clearbrook, Minnesota
WTC-BAK, to trade just 35 cents a
barrel below the West Texas
Intermediate benchmark last week,
dealers say, the narrowest discount
since July 2013. On Tuesday, it
widened slightly to a 75-cent
discount. Four months ago, it
traded at a $7.50 discount.
"The rapid spread contraction may
be indicative of a faster-than-
anticipated production decline,
presenting upside risk to our price
forecast" in the second half,
Barclays analysts wrote in a report.
There are other compelling reasons for Bakken crude's relative strength, to be sure.
Canada's oil exports to the United States suffered their biggest monthly decline on record this
spring due to maintenance on big oil sands projects as well as forest fires that slashed a tenth of
Alberta's total oil production.
Refiners in the U.S. Midwest region ran the most crude ever for the month of May thanks to a light
maintenance slate and robust margins, triggering a bidding war for light barrels.
Regardless, the disappearing discount offers a partial reprieve for large producers like Continental
Resources (CLR.N) and Hess Corp (HES.N) after the past year slashed global oil prices by as
much as 60 percent to six-year lows.
Thanks to the stronger differentials, Bakken crude BAK- has risen 54 percent from its mid-March
low, whereas U.S. WTI prices CLc1 are up only 37 percent, according to Reuters data.
DATA LAG
Oil drilling rigs are down 58 percent this year in North Dakota, setting the stage for a reversal after
years of breakneck production growth. The timing and scale of that descent have been unclear
due to lagging official data.
North Dakota's Department of Mineral Resources will release figures for April production on
Friday. The No. 2 oil-producing state posted a surprising jump in oil output in March.

The Energy Information Administration estimates that Bakken output was little changed from a
record high 1.3 million bpd in March, but expects it to fall by 70,000 bpd over the following three
months
Others still see growth through May. PointLogic, which uses real-time natural gas flow data to
forecast oil production, estimates output rose by 31,000 bpd in April versus March and kept rising
through May before turning lower recently, according to data made available to Reuters.
Last week, North Dakota's crude-by-rail loadings averaged 437,000 bpd at monitored terminals,
the lowest level since mid-March, industry provider Genscape said. Meanwhile, Enbridge's
(ENB.TO) North Dakota pipeline system has run close to capacity, signifying that production has
fallen.
HUNGRY REFINERIES
The rise in differentials differs from the brief rally in mid-2013, when the North Dakota crude
traded at a premium. At that point, competing new infrastructure bid up prices.
This time it is largely about supply from Canada. U.S.-bound exports averaged under 2.8 million
bpd in May, EIA data shows, down 360,000 bpd from April - the biggest such monthly decline
ever.
Syncrude Canada's oil sands output has fallen by more than 50 percent between January and
May on a planned turnaround.
And recent Alberta wildfires hit production from companies including MEG Energy (MEG.TO) and
Cenovus Energy Inc (CVE.TO). Benchmark WCS differentials climbed to a five-year high, trading
at a $7.00 discount last week.
Cold Lake crude, most directly affected, is much heavier than Bakken light, but traders say that
refiners have adjusted their slates to step up Bakken buying.
"Why pay -$8 (vs WTI) for Cold Lake when you can pay -$0.50 for Bakken?" said one trader.
"That puts a bid behind Bakken."
Meanwhile, Midwest refiners are running at full speed ahead of summer gasoline demand. PADD
2 throughput rose to 2.7 million bpd last month, the highest ever for May and up 3 percent from a
year earlier, EIA data shows.
LOOKING ABROAD
It is unclear how long the strength may last. Canadian production is already recovering and
Midwest refinery runs REFCR-2-EIA have fallen for the past three weeks.
In addition, traders say elevated Bakken prices have priced out East Coast refiners that have
been buying about a third of output, EIA data shows.
Just last week, the Bakken and West Africa Qua-Iboe BFO-QUA differential tightened to the
smallest since June 2013. With the arbitrage opening for imported crude, Bakken barrels may
soon be seeking new homes.
"The question is just how fast are people reacting?" said Sandy Fielden at RBN Energy. "How
quickly are people jumping off rail and into pipeline? For the short term, there's more demand from
Midwest refiners. But will it stay?"

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Khaled Malallah Al Awadi,
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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 10 June 2015 K. Al Awadi

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