New base 702 special 07 october 2015

Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – 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 1
NewBase 07 October 2015 - Issue No. 702 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: UAE’s Shah gas project hits full output capacity – official
Reuters + NewBase
The Shah gas project which began operations this year in the United Arab Emirates has reached its full
production capacity, a top company official said on Tuesday. “We have ramped up to full production, which
is one billion cubic feet per day (bcf),” Saif Ahmed al Ghafli, chief e xecutive of Al Hosn Gas, told
reporters on the sideline of an conference in Abu Dhabi.
Al Hosn Gas is the Shah gas development joint venture in which Abu Dhabi National Oil Co (Adnoc) holds
a 60 per cent share and US-based Occidental Petroleum the other 40 per cent.
The multi-billion dollar project is meant to produce usable gas from Shah’s high-sulphur field.
The project is expected to process sour gas into 0.5 bcf/d of usable gas in the remote desert and is vital for
keeping the UAE supplied with fuel and reducing its growing gas imports.
The UAE is investing $35bn to diversify its energy mix and reduce its dependence on natural gas imports
for power generation, the country’s energy minister said on Sunday.
Input Product Sour Gas = 1.0 BCFD
Produce ;-
Sales gas (500 million scf/day)
NGL (4,400 TD);
Sulfur (9,200 TD) and

Saudi Aramco in talks to buy CNPC refinery stake
Reuters
Saudi Aramco, the world’s biggest oil producer, is in talks to acquire a stake in a China National
Petroleum Corp (CNPC) refinery as well as retail assets, people familiar with the matter said - a
deal that would help it sell more of its output to China amid growing competition.
The deal is estimated to be worth around $1bn to $1.5bn, although final valuations, assets and
stakes are subject to change, they said.
The sale of a stake in an established refinery marks a departure from the past for China as foreign
energy firms have generally been restricted to investing in greenfield projects. Beijing has,
however, been increasingly keen to restructure the country’s many sprawling state-owned
enterprises.
For China, the deal would ensure a steady supply of crude to feed growing demand, while
providing CNPC with fresh funds to cut down debt at a time when energy companies’ profits are
under pressure from sliding oil prices.
Saudi Aramco is in discussions to buy a minority stake in at least one of CNPC’s new refineries
and some 300 retail outlets, one of the people said. CNPC operates 26 refineries and
petrochemical businesses.
“Most of the value for Saudi Aramco is in the refinery,” the person said. “This will place the Saudis
in a favourable position to sell their crude at time of increased supply from other countries,” the
person added.
Saudi Aramco declined to comment and a representative for CNPC was not available for
comment. Sources declined to be identified as the negotiations are confidential. It remains unclear
when a deal will be finalised, the people said, adding that discussions started about five months
ago.
Saudi Aramco is being advised by
Deutsche Bank, while CNPC is working
with HSBC and Citic Securities,
according to the sources. Deutsche
Bank and HSBC declined to comment,
while Citic Securities was not available
for a comment.
CNPC’s planned asset sale comes after
China’s state-controlled oil giant
Sinopec Corp raised $17.5bn last year
by selling a 29.9% stake in its retail
business, ahead of a potential IPO in
2016.
Saudi Aramco wants to make inroads into more advanced chemicals to diversify away from its oil
and basic petrochemicals businesses. In March, it signed a new $10bn loan deal with 27 financial
institutions, partly to finance the acquisition of a stake in German rubber firm Laxness.

Modern technology gives Qatar edge in global LNG markets: Al-Attiyah
Reuters
The adoption of modern technology has helped Qatar reduce unit costs to a level unmatched by
other liquefied natural gas producers, giving it a competitive edge in global markets, said HE
Abdullah bin Hamad al-Attiyah, chairman, Abdullah Bin Hamad Al-Attiyah International Foundation
for Energy and Sustainable Development.
“Qatar achieved a fundamental milestone for the LNG industry by scaling up liquefaction trains to
a record new level using Air Products’ proprietary APX process technology. Currently, six out of
our 14 LNG trains have the capacity
of producing 7.8mn tonnes each per
year, making them the world’s largest
LNG trains ever to be built,” al-Attiyah
said in his address at the closing
plenary session of the Science and
Technology in Society Forum (STS)
in Kyoto, Japan.
The role of technology in the future of
sustainable energy is quite significant
given that the environmental
implications of meeting the world’s
energy demands suggest that energy
technologies with near-zero
emissions will eventually be required
to ensure such sustainability.
Accordingly, there is a pressing need for substantial research, development, and initiation of
programmes aimed at launching advanced energy technologies.
“Some of these technologies are readily available, including the technological revolution in power
generation where natural-gas-fired combined cycles is offering low costs, high efficiency and low
environmental impact. Modern gas-fired power plants emit 50% less carbon dioxide than coal
plants and they are 40% more energy efficient” said al-Attiyah, the former Deputy Premier and
Minister of Energy and Industry.
Emerging innovations offer the potential to use conventional sources of energy, mainly fossil fuels,
in ways that are cleaner, more efficient, safer, flexible, and affordable, he said. “In Qatar, we
understand that economic development must be based on the implementation of new technology
which often involves challenges; however, meeting these challenges has become necessary in
order to thrive in an increasingly competitive market,” al-Attiyah said.
Entrepreneurs and small companies have the potential to provide innovative solutions. They are
the key to unlocking the potential of an even more technology driven energy era. In this regard,
the Qatar Science and Technology Park offers a unique business environment for start-up
enterprises in the areas of energy, environment, health sciences and ICT.
Also, large “research cooperation programmes” have been launched with international corporations and
Qatar welcomes new opportunities to take advantage of human ingenuity in the fields of energy and
environment. It is becoming increasingly important to develop technologies that enable us to achieve
sustainable economic development in a safe and environmentally responsible manner, al-Attiyah said.
HE al-Attiyah addresses the closing session of the Science and
Technology in Society Forum (STS) in Kyoto, Japan.

Egypt Awards Four Offshore Oil & Gas exploration Licences
Reuters + Gulf News
Egypt has awarded four new licences to explore for oil and gas off its Mediterranean coast, weeks
after Eni’s giant Zohr gas find piqued fresh international interest in the area.
Egypt’s state gas company EGAS said in a statement it had awarded one licence to Britain’s BP
and one to Italy’s Edison. A consortium involving BP and Eni’s Egyptian subsidiary had also
picked up a bloc as had another consortium involving Eni, BP and France’s Total.
Eni announced in late August it had discovered the largest known gas field in the Mediterranean
off the Egyptian coast.
The Italian major predicts the Zohr field could hold 30 trillion cubic feet of gas, covering an area of
about 100 square kilometres (39 square miles). It could be a game-changer for Egypt, whose $3.5
billion (Dh12.9 billion) debts to foreign energy companies had made it increasingly difficult to
attract major investments.
Egypt, which once exported gas, has become a net energy importer over the last few years as
production has failed to keep up with domestic demand. Not only has Egypt diverted to the
domestic market gas originally earmarked for export, but it has failed to keep up payments to the
foreign energy companies producing it.
The crisis had discouraged international energy companies from making major investments in
Egypt’s oil and gas sector at a time when it needed to make new discoveries and boost output.
The Zohr find, however, is likely to encourage oil majors to look more carefully at the eastern
Mediterranean region, which has yielded some significant discoveries in recent years. The EGAS
statement said the new concessions would see the companies making total investments of at
least $306 million, conducting seismic studies and sinking eight discovery wells.

Iran's October oil exports head towards seven-month low
REUTERS + NEWBASE
Iran's crude sales are on track to hit the lowest in seven months in October, according to a source
with knowledge of its preliminary shipping plans, showing how Tehran is struggling to boost oil
exports even after reaching a landmark nuclear deal.
The weaker sales come despite offers of price discounts to stimulate purchases by Asian buyers
as Iran tries to regain market share lost to rivals such as Saudi Arabia over the last 3-1/2 years of
Western sanctions.
September and October loadings - for arrivals mostly in October and November - indicate
purchases by Iran's main buyers in Asia are set to fall a third consecutive month, hit by refinery
turnarounds and projections for mild winter weather. China, the biggest buyer of Iranian oil, is
taking the lowest volumes in about a year.
The drop counters expectations that Iran's exports would rise after Tehran and six world powers
reached a nuclear agreement on July 14, although the sanctions are unlikely to be officially
relaxed until next year. The sanctions - aimed at persuading Iran to discuss curbs to its nuclear
program - cut Tehran's exports by more than half and cost it billions of dollars a month in lost
sales.
Iran's crude exports, excluding condensate, are set to fall to around 830,000 barrels per day (bpd)
this month, down 14 percent from revised figures for September and the lowest since March,
according to the source. India and Japan did not load any Iranian oil in March to hold shipments
within sanction limits.
China plans to lift about 370,000 bpd this month, down nearly 10,000 bpd from updated
September loadings. China will also lift around 33,000 bpd of condensate - an ultra light crude that
Iran produces from its gas fields - between September through to next March, another industry
source has said.
That would put China's total crude and condensate purchases this month at around 400,000 bpd,
the lowest since the 340,000 bpd that arrived from Iran in October 2014. India, Iran's second-
biggest buyer, is set to cut its October loadings by 20 percent to around 170,000 bpd from the
previous month.
In contrast, Japan and South Korea are
lifting around 100,000 bpd and 80,000
bpd, an increase of 10 percent and 20
percent, respectively, from September.
Iran's four Asian buyers are set to load
about 720,000 barrels in October, down
12 percent from September. Turkey is
also lifting around 110,000 bpd, the
source said, with about 100,000 bpd
going into offshore storage over
September and October.

NewBase 07 October - 2015 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Crude oil futures push higher after range breakout
Reuters + NewBase
Crude oil futures rose further in thin Asian trade on Wednesday after breaking out of a month-long
trading range on a forecast suggesting a global glut in supply may be easing. Oil prices jumped
more than $2 a barrel in the previous session with the global benchmark, Brent crude, closing
above $50 a barrel for the first time in a month.
The contract had risen 41 cents to $52.33 a barrel by 0348 GMT, after settling up $2.67, or 5.4
percent on Tuesday. But the volume was low with Chinese traders away for National Day holidays
that last through Wednesday.
The West Texas Intermediate (WTI) benchmark for U.S. crude gained 67 cents to $49.20 a barrel.
The contract climbed $2.27, or 4.9 percent, on Tuesday.
Oil prices are also being given a continued boost from the U.S. jobless numbers on Friday that
pushed back expectations for a rate rise by the Federal Reserve to next year, amid a dearth of
data early this week, said Avtar Sandu, senior commodities manager at Phillip Futures in
Singapore.
Oil price special
coverage

"We expect slightly lower numbers and that will add another boost to the market," Sandu said.
Global oil demand is expected to increase by the most in six years as supply from non-OPEC
countries stalls, the EIA said in its Short Term Energy Outlook on Tuesday. U.S. production, which
has surged in recent years and caused a roughly 50-percent decline in prices since June last
year, is also starting to decline.
The slowdown in U.S. output is giving heart to members of the Organization of Petroleum
Exporting Countries (OPEC), which has held production steady to force out more expensive
producers, despite the pain to the finances of its members.
OPEC Secretary General Abdullah al-Badri told an industry conference in London on Tuesday
that the market is improving, suggesting the grouping is unlikely to change its strategy of
defending market share.

Opec sees oil market improving; lower price will not persist
Reuters
Opec sees the oil market improving because of higher demand for the group’s crude and a drop in
supply growth from non-members, its secretary-general said, the latest sign that Opec believes its
strategy of defending market share is working.
Oil prices have almost halved in the last year on oversupply in a drop that deepened after the
Organisation of the Petroleum Exporting Countries in 2014 changed strategy to protect market
share against higher-cost producers, rather than cut output to prop up prices as it had done in the
past.
“There is an improvement in the market,” Abdullah al-Badri told reporters on the sidelines of an
industry conference in London yesterday. “This situation may not stay long, more than two years,”
he said in response to a question on how long the market would take to rebalance.
Opec meets to review its output policy on December 4 and Badri’s comments add to signs that the
group is unlikely to be diverted from its current strategy. Badri himself declined to be drawn on
what Opec oil ministers would decide. Addressing the Oil and Money conference in London, an
annual gathering of senior industry executives, Badri urged producers outside Opec to help tackle
a global surplus of crude, which he put at 200mn barrels.
“All of us should work together, Opec and non-Opec, work together to get rid of this overhang,”
Badri said. “There is one problem we are facing: the overhang of 200mn barrels.”
Opec has invited non-Opec countries to attend a technical meeting on October 21 at its Vienna
headquarters, to discuss the market, Badri told reporters, following on from a similar meeting held
in May. Non-Opec producers including Russia have refused to cooperate with Opec in cutting
output, although forecasters have reduced estimates for supply growth outside Opec because of
the price slump.
Opec secretary general Abdullah al-Badri (left), president of Nalcosa, Nordine Ait-Laoussine (right), and
International Energy Agency executive director Fatih Birol (centre) attend the 2015 Oil & Money
conference in central London yesterday. Al-Badri urged producers outside Opec to help tackle a global
surplus of crude.

Badri said oil supply growth from non-Opec producers might be zero or negative in 2016 because
of lower upstream investment. Investment has been cut by around $130bn this year from about
$650bn in 2014, he said.
The International Energy Agency, which advises industrialised countries on oil policy, sees an
even larger impact on non-Opec supply in 2016 from low prices. IEA Executive Director Fatih
Birol, also at the conference, said the drop in upstream oil investment in 2015 would be at least
20% versus 2014, the biggest ever fall.
Opec expects global demand for its crude, under pressure in recent years because of rising
supplies from outside the group, to rise to 30.3mn barrels per day in 2016, about 1mn bpd more
than in 2015.
“We will see the effect of the cut on production,” Badri said. “This will mean less supply in the near
future.” “We are seeing now a low price. After a few months, we will not see this. We will see a
higher price again.”

Shell CEO sees first signs of oil price recoveryREUTERS
Oil markets are beginning to recover but the scale of global oversupply means prices may rise
only slowly, the chief executive of Royal Dutch Shell Plc (RDSa.L) said on Tuesday.
"I see the first mixed signs for recovery of oil prices," Ben van Beurden told an oil industry
conference in London. "But with U.S. shale oil being more resilient than we originally thought and
a lot of oil still in stock, it will take some more time to rebalance demand and supply," he added.
Oil prices have collapsed over the last year in the face of heavy oversupply, with benchmark Brent
crude LCOc1 falling to below $50 a barrel from a high above $115 in June 2014.
The Organization of the Petroleum Exporting Countries led by Saudi Arabia has increased
production in an attempt to build market share, leaving some other producers, including shale
companies in North America, operating below break-even costs.
Van Beurden said many U.S. oil producers would struggle to refinance while prices remained so
low, leading to lower output in the future: "Producers are now looking for new cash to survive and
they will probably struggle to get it."
Longer-term, there was a risk that low levels of global production could bring a spike in oil prices,
he said. If prices remained low for a long time and oil production outside OPEC and the United
States declined due to cuts to capital expenditure, there was not likely to be any significant spare
capacity left in the system, he said. "This could cause prices to spike upwards, starting a new
cycle of strong production growth in U.S. shale oil and subsequent volatility," van Beurden said.

NewBase Special Coverage
News Agencies News Release 07 Oct.. 2015
US Oil Production On Brink Of 'Dramatic' Decline, Exec Says
by Reuters - Ron Bousso & Dmitry Zhdannikov
Oil executives warned on Tuesday of a "dramatic" decline in U.S. production that could pave the
way for a future spike in prices if fuel demand increases.
Delegates at the Oil and Money conference in London, an annual gathering of senior industry
officials, said world oil prices were now too low to support U.S. shale oil output, the biggest
addition to world production over the last decade.
"We are about to see a pretty dramatic decline in U.S. production growth," the former head of oil
firm EOG Resources Mark Papa, told the conference.
Papa, now a partner at U.S. energy investment firm Riverstone Holdings LLC, said U.S. oil
production would stall this month and begin to decline from early next year. He said the main
reason for the decline would be a lack of bank financing for new shale developments.
Official data show that nationwide U.S. output has already begun to decline after reaching a peak
of 9.6 million barrels per day (bpd) in April, although production in some big shale patches,
including North Dakota, has held steady thus far. The Energy Information Administration forecast
on Tuesday that output would reach a low of around 8.6 million bpd next year.
Until this year, U.S. oil output was growing at the fastest rate on record, adding around 1 million
bpd of new supply each year thanks to the introduction of new drilling techniques that have
released oil and gas from shale formations.
But oil prices have almost halved in the last year on oversupply in a drop that deepened after the
Organization of the Petroleum Exporting Countries in 2014 changed strategy to protect market
share against higher-cost producers, rather than cut output to prop up prices as it had done in the
past.
Benchmark Brent crude was up 5 percent, or $2.50 a barrel, at $51.75 on Tuesday as investors
digested news from the London conference. It peaked in recent years above $115 a barrel in June
2014.
Spike
The chief executive of Royal Dutch Shell Plc agreed, saying U.S. oil producers would struggle to
refinance while prices remained so low, leading to lower output in future.
"Producers are now looking for new cash to survive and they will probably struggle to get it," Ben
van Beurden said.

Longer term, there was a risk that low levels of global production could bring a spike in oil prices,
he said.
If prices remained low for a long time and oil production outside OPEC and the United States
declined due to capital expenditure cuts, there was not likely to be any significant spare capacity
left in the system, he said.
"This could cause prices to spike upwards, starting a new cycle of strong production growth in
U.S. shale oil and subsequent volatility," van Beurden said.
Adam Sieminski, administrator at the U.S. Energy Information Administration, told reporters on the
sidelines of the conference the U.S. oil industry had reacted to lower prices by improving its
productivity.
But this process could not continue forever.
"Now we are seeing the limits at least in the near term and it is beginning to impact production,"
Sieminski said. "We see (U.S. oil production declines) continuing into next summer."
The Secretary-General of OPEC, Abdullah al-Badri, said oil supply growth from non-OPEC
producers might be zero or negative in 2016 because of lower upstream investment.
But Papa said if U.S. light crude oil prices went back up to $75 a barrel, U.S. oil production would
resume growth at around 500,000 bpd - or around half the record growth rates observed in the
past few years.
"I see the United States as a long-term growth producer," he said. "If low oil prices prevail - then
the correction in oil prices will be much more severe."

Solar and Wind Just Passed Another Big Turning Point
Bloomberg + Tom Randall
Wind power is now the cheapest electricity to produce in both Germany and the U.K., even
without government subsidies, according to a new analysis by Bloomberg New Energy Finance
(BNEF). It's the first time that threshold has been crossed by a G7 economy.1
But that's less interesting than what just happened in the U.S.
To appreciate what's going on there, you need to understand the capacity factor. That's the
percentage of a power plant's maximum potential that's actually achieved over time.
Consider a solar project. The sun doesn't shine at night and, even during the day, varies in
brightness with the weather and the seasons. So a project that can crank out 100 megawatt hours
of electricity during the sunniest part of the day might produce just 20 percent of that when
averaged out over a year. That gives it a 20 percent capacity factor.
One of the major strengths of fossil fuel power plants is that they can command very high and
predictable capacity factors. The average U.S. natural gas plant, for example, might produce
about 70 percent of its potential (falling short of 100 percent because of seasonal demand and
maintenance). But that's what's changing, and it's a big deal.
For the first time, widespread adoption of renewables is effectively lowering the capacity factor
for fossil fuels. That's because once a solar or wind project is built, the marginal cost of the
electricity it produces is pretty much zero—free electricity—while coal and gas plants require more
fuel for every new watt produced. If you're a power company with a choice, you choose the free
stuff every time.
It’s a self-reinforcing cycle. As more renewables are installed, coal and natural gas plants are
used less. As coal and gas are used less, the cost of using them to generate electricity goes up.
As the cost of coal and gas power rises, more renewables will be installed.
The virtuous cycle has begun.
Wind and solar have long made up a small fraction of U.S. electricity—about 5 percent in 2014.
But production has been rising at an exponential rate, and those two energy sources are now big
enough to influence when coal and natural gas plants are kept running, according to BNEF.2
There are two reasons this shift in capacity factors is important. First, it's yet another sign of the
rising disruptive force of renewable energy in power markets. It's impossible to brush aside
renewables in the U.S. in the same way it might have been just a few years ago. "Renewables

are really becoming cost-competitive, and they're competing more directly with fossil fuels," said
BNEF analyst Luke Mills. "We're seeing the utilization rate of fossil fuels wear away."
Second, the shift illustrates a serious new risk for power companies planning to invest in coal or
natural-gas plants. Historically, a high capacity factor has been a fixed input in the cost
calculation. But now anyone contemplating a billion-dollar power plant with an anticipated lifespan
of decades must consider the possibility that as time goes on, the plant will be used less than
when its doors first open.
Capacity Factors Take a Sharp Turn3
Most of the decline in capacity factors is due to expensive "base-load plants that are being turned
on less because of renewables," according to BNEF analyst Jacqueline Lilinshtein. Plants
designed to come online only during the highest demand of the year, known as peaker plants,
play a smaller role. In either case, the end result is that coal-fired and gas-fired electricity is
becoming more expensive and the profits less predictable.
The opposite is true of wind and solar, as well as new battery systems that can be paired with
renewables to replace some peaker plants. Wind power, including U.S. subsidies, became the
cheapest electricity in the U.S. for the first time last year4
, according to BNEF. Solar power is a bit
further behind, but the costs are dropping rapidly, especially those associated with financing a
new project.
Latest Solar Costs by State
The economic advantages of wind and solar over fossil fuels go beyond price.5
Still, it's
remarkable that in every major region of the world, the lifetime cost of new coal and gas
projects6
are rising considerably in the second half of 2015, according to BNEF. And in every
major region the cost of renewables continues to fall.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
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Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
Mobile: +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 25 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE
operations base , Most of the experience were spent as the Gas Operations
Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility &
gas compressor stations . Through the years, he has developed great
experiences in the designing & constructing of gas pipelines, gas metering &
regulating stations and in the engineering of supply routes. Many years were spent drafting, &
compiling gas transportation, operation & maintenance agreements along with many MOUs for the
local authorities. He has become a reference for many of the Oil & Gas Conferences held in the
UAE and Energy program broadcasted internationally, via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase 07 Octopber 2015 K. Al Awadi

6th
– 8th
Oct.

New base 702 special 07 october 2015

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