New base energy news 24 december 2018 no-1220 by khaled al awadi

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NewBase Energy News 24 December 2018 - Issue No. 1220 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: Despite an official effort to move beyond oil, the nation of
cheap gasoline is pushing back. Bloomberg - Roba Aljohani
Dubai has ambitious goals for electric cars. Early adopters get free parking, no tolls and discounts
on registration fees. Even the power is gratis at the 200 charging stations the government installed
throughout the city.
The trouble is the public is just fine without them.
The biggest buyer of electric vehicles is the government itself, dealers say, with hundreds sold in
bulk to local authorities over the past few years. The few others spotted speeding up Dubai’s
highways tend to be Teslas, which start at 335,730 dirhams ($91,400). Expats will splash out in this
relatively low-tax city, but they often go for flashy sports cars.
The economic benefits of ownership aren’t strong in the United Arab Emirates, which has some of
the most affordable gas prices in the world and some of the hottest weather. It costs about $41 to
fill a 16-gallon tank of gasoline in Dubai, compared with about $50 in the U.S. or $125 in Norway,
A nearly empty Tesla showroom in Dubai.

where plug-in hybrid and electric vehicles have boomed faster than anywhere else. Air
conditioning—essential when the temperatures are regularly above 110 degrees in the summer—
will drain an EV battery, decreasing the range. The government perks but
“Unless you get someone who’s really into looking after the environment, to get the consumers into
those vehicles, there’s not a lot of incentive,” said Bill Carter of Autodata Middle East, which
provides data and valuation in the local industry.
Daily commutes in Dubai commonly involve a highway that stretches to 16 lanes in some
areas. “The highways in Dubai and the U.A.E. can be a little bit intimidating, so people here opt for
bigger cars,” said Karim El-Jisr, executive director of the Dubai-based SEE Nexus Institute, which
advises cities on sustainable development. “If we want to accelerate the uptake, we need a wider
range of electric vehicles to satisfy tastes and wallets.”
Alf Ellefsen, a consultant in Dubai who drives a Jaguar, talks to his sister in Norway about her
electric car. “It costs them close to nothing to run,” he said. “Here, you can buy a huge car for half
the price that you can in Norway, and running it is like a [quarter] of the price. So why would you
pay extra for an electric car?”
Still, the government estimates it could accommodate 32,000 electric vehicles on the road by 2020,
if only car companies would offer suitable models for sale in the emirate of 3 million people. “Even
today, if we give every incentive you can think of, there aren’t cars available,” said Faisal Rashid, a
director at the Dubai Supreme Council of Energy. He says they regularly raise the supply issue with
local car dealers.

There are about 4,000 hybrid and electric vehicles on the road now in Dubai, including fewer than
1,000 fully electric vehicles, he said. There’s a “soft” target of 10 percent of all vehicles in Dubai to
be electric by 2030, he said.
When Renault started selling its electric Zoe three years ago, its first customer was the Dubai
Electricity and Water Authority, followed by the Dubai Police and other utility and government
agencies. “On the retail side, we haven’t seen the same success,” said Salah Yamout, director of
sales and marketing at Arabian Automobiles Co., which sells the Renault brand here.
Tesla declined to provide sales figures for the region. But the company is taking reservations for the
lower-priced Model 3 sedan and expects to deliver next year. The Road Transport Authority, which
oversees the roads, public transportation and taxis, has said it will buy 200 Teslas to integrate into
its fleet of 5,000 vehicles.
Tesla drivers don’t have to fight for spots at the charging station inside the Sustainable City in Dubai.
Some of the first electric-car chargers were installed in 2015 at Dubai Sustainable City, a 5 million-
square-foot development designed to showcase the best practices for a modern, eco-friendly city.
Among the town’s 2,700 residents, El-Jisr said, there are about 15 Teslas and no other electric
vehicles.
Two of those Teslas belong to Fiona Brenninkmeijer, who ordered them right when Tesla opened
its service center and showroom in the region in July 2017. “I think they didn’t believe their luck,”
she said of the salesmen.

UAE: ADNOC awards Austria’s OMV 5 percent stake in Ghasha
offshore ultra-sour gas concession … Source: ADNOC
The Abu Dhabi government and the Abu Dhabi National Oil Company (ADNOC) have awarded
Austria’s OMV a 5 percent stake in the Ghasha ultra-sour gas concession that comprises the Hail,
Ghasha, Dalma, Nasr, Sarb and Mubarraz sour gas fields.
OMV, which joins Italy’s Eni and Germany’s Wintershall as ADNOC’s partners in the concession,
will contribute 5 percent of the project capital and operational development expenses. Eni was
awarded a 25 percent stake and Wintershall a 10 percent stake in the Ghasha concession in
November.
The concession agreement, which
has a term of 40 years, was signed
by His Excellency Dr. Sultan
Ahmed Al Jaber, UAE Minister of
State and ADNOC Group CEO,
and Dr. Rainer Seele, Chairman of
the Executive Board and CEO of
OMV.
H.E. Dr. Al Jaber said: 'This long-
term strategic agreement with
OMV, as well as the other Ghasha
concession agreements we have
concluded recently, underscores
ADNOC’s commitment to
maximizing value from Abu
Dhabi’s substantial gas resources
and to ensuring a sustainable and
economic supply of gas, in line
with the leadership’s directives.
'The combination of rising demand
for gas, more advanced
technology and our industry-
leading experience in developing
sour gas fields, makes it possible for us to commercially and holistically unlock value from our vast
sour gas resources.
'This agreement builds on, and extends, our strong partnership with OMV, who we collaborate with
in key areas across the oil and gas value chain. They bring extensive experience in sour gas
operations, in Austria and Pakistan, and, like ADNOC, have a proven record working with mature
and complex reservoirs. It will help ensure our investment, in the Ghasha concession, will maximize
long-term returns for the benefit of ourselves, our partners and the nation.'
The Ghasha concession awards follow Abu Dhabi’s Supreme Petroleum Council’s approval of
ADNOC’s integrated gas strategy, which will see the development, in phases, of Abu Dhabi’s
substantial gas reserves, as the UAE moves towards gas self-sufficiency and aims to transition from
a net importer of gas to a net gas exporter.
The project is expected to produce over 1.5 billion cubic feet of gas per day when it comes on stream
around the middle of the next decade, enough to provide electricity to more than two million homes.

Once complete, the project will also produce over 120,000 barrels of oil and high-value condensates
per day.
Over the project’s lifetime, ADNOC expects substantial benefits to flow back into the UAE economy
under its In-Country Value program, which is intended to stimulate commercial opportunities for
local businesses, catalyze socio-economic development and create additional employment
opportunities for UAE nationals.
Dr. Seele said: 'We are pleased to be
awarded a stake in the largest sour gas
and condensate fields in Abu Dhabi and to
strengthen our partnership with ADNOC.
We are confident that our technological
expertise will contribute to value-creation
and profitable growth, for all partners
involved. Today’s signature marks a long-
term commitment, and it is another
important step in the successful
implementation of our strategy 2025. With
this agreement, we are expanding our
already material position in the Middle
East and are further shifting our upstream
production towards gas.'
Sour gas is defined by its significant
hydrogen sulfide content; in the past this
has made processing the natural gas more
complex. This is the reason why the
resource has lain beneath the surface in
some fields for decades after its initial discovery. However, the combination of rising demand and
technological advances has now made extraction and processing viable.
In developing the Hail, Ghasha, Dalma and other ultra-sour gas fields in the concession, ADNOC
will capitalize on its world-leading expertise and successes in ultra-sour gas development, gained
from the development of the Shah reservoir, creating an ultra-sour gas center of excellence for the
region.
In addition to developing the Ghasha concession area, ADNOC also plans to increase production
from its Shah sour gas field to 1.5 billion cubic feet per day and move forward to develop the sour
gas fields at Bab and Bu Hasa. ADNOC also plans to tap gas from its gas caps and unconventional
gas reserves, as well as new natural gas accumulations, which will continue to be appraised and
developed as the company pursues its exploration activities.
OMV, which has a long-standing experience in the treatment of sour gas, collaborates with ADNOC
in a number of areas. In April, it was awarded a 20 percent stake in Abu Dhabi’s Sarb and Umm
Lulu offshore concession. Since 2016, it has also been leading on a four-year seismic, drilling and
engineering work program to explore and appraise areas that include the fields in the Ghasha
concession.
OMV is also a shareholder in Borealis, ADNOC’s partner in Borouge, a leading global provider of
innovative plastic solutions, and, in May 2017, ADNOC and OMV agreed to work together to explore
potential opportunities in support of ADNOC’s downstream growth ambitions.

UAE:Mubadala, Dubal holding in Dh1b power and water plant
Gulf News
Abu Dhabi’s Mubadala Investment Company and Dubal Holding plan to set up joint venture to
develop power and water desalination plant in Dubai. State-of-the art facility to be built in Dubai's
Jebel Ali
The new state-of-the-art plant with a capacity of over 600 megawatts of electricity will be built at
EGA’s (Emirates Global Aluminium) smelter at Jebel Ali in Dubai, according to a statement from
Emirates Global Aluminium on Tuesday.
Mubadala and Dubal Holding signed a 25-year deal with EGA worth over Dh1 billion to develop the
project. EGA intends to buy the facility’s output for 25 years following commissioning. EGA is the
largest industrial company in the UAE outside oil and gas, and is jointly owned by Mubadala and
Dubal Holding.
“This deal will enable EGA to further improve energy efficiency, saving natural resources and
reducing the costs and environmental emissions associated with our aluminium production.
Bringing in our shareholders to invest in such power facilities through a new company makes sense
for EGA from a capital allocation perspective as we expand
our core business upstream and internationally,” said
Abdulla Kalban, Managing Director and Chief Executive
Officer of EGA.
The shareholders of the joint venture also signed an
agreement with Siemens to install the UAE’s first combined
cycle H-class gas turbine, a leading technology in efficient
power generation. The new power facility is expected to
reduce greenhouse gas emissions from EGA’s power
generation at Jebel Ali by some 10 per cent.

NewBase 24 December 2018 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil Gets Little Relief From OPEC's Hints That Curbs Could Deepen
Oil held losses near $46 a barrel as worries over U.S. supplies and the global economy
overshadowed signals from OPEC that it may extend or even deepen its pledged output curbs.
Futures were little changed in New York, after declining 11 percent last week -- the most since
January 2016. Officials from Iraq, Kuwait and the United Arab Emirates agreed with Saudi
Arabia’s expectation that the group will extend its cuts for another six months. The U.A.E.’s energy
minister, while stressing that the agreed 1.2 million barrel-a-day reduction will clear a glut in the first
quarter, hinted additional curbs could be discussed.
The market remains skeptical over the effectiveness of the curbs by the Organization of Petroleum
Exporting Countries and its allies including Russia because of surging American shale production.
While the U.S. is pumping at record levels and inventories are also high, President Donald Trump’s
trade war with China and the Federal Reserve’s rate-hike policy are raising concerns over the health
of the global economy. Prices have collapsed 40 percent from a four-year high in October.
“Incredibly, in the face of even deeper production cuts, petroleum markets have hit fresh lows,” said
Stephen Innes, the head of trading for Asia Pacific at Oanda Corp. in Singapore. “While the
production cut should restore a semblance of supply balance in the first half of 2019, global growth
concerns and shale production have investors deeply concerned.”
Oil price special
coverage

West Texas Intermediate for February delivery was at $46 a barrel on the New York Mercantile
Exchange, up 41 cents, at 1:10 p.m. in Seoul. The contract lost 0.6 percent to close at $45.59 on
Friday. Total volume traded was about 15 percent above the 100-day average.
Brent for February settlement was 58 cents higher at $54.40 a barrel on London’s ICE Futures
Europe exchange. Prices declined 10.7 percent last week to settle at $53.82. The global benchmark
crude traded at an $8.41 premium to WTI.
The U.A.E.’s Suhail Al Mazrouei said while the production cuts have been
carefully studied, there’s always an option for a discussion if more than
what’s planned is required. At a press briefing in Kuwait, ministers from Iraq,
the U.A.E. and Algeria took turns repeating the message that OPEC will
deliver its cuts.
In the U.S., working oil rigs gained by 10 to 883 last week, according to data released Friday by
oilfield services provider Baker Hughes. More than 100 additional rigs have been deployed across
American fields this year. At the same time, the country’s crude production remains near the record
level of 11.7 million barrels a day, according to government data.
That, and some pretty unfounded skepticism on OPEC’s
willingness to follow through with production cuts.
By Julian Lee
Not only are oil prices down nearly 40 percent since early October, they’re below where they were
when the OPEC+ group of producers began their first round of output cuts in January 2017.
There are two main factors behind this pessimism. The first stems from an undue skepticism about
the group's willingness to trim output. The second follows from a negative view about the global
outlook that is subject to change – and if it does, a sharp rebound is in store.
The recent Russian-brokered deal to cut around 1.2 million barrels a day from global supply in
January should have put a floor under prices. Their drop suggests traders don't believe the cuts will
be implemented.
The bulk of the reduction from current production levels hinges on Saudi Arabia. Its oil minister
pledged in Vienna that the kingdom would go even further than it had promised to reduce output,
just as it did in 2017. The history of the OPEC+ deal so far shows that those who really matter
(Saudi Arabia, the U.A.E., Russia) came through with the cuts – even if it took them a little time to
get there.
Back Where We Began
Brent prices are back below where they were when OPEC+ output cuts began in January 2017
Source: Bloomberg

Production will probably also continue to fall in Venezuela, as workers flee the country and a lack
of maintenance on wells, pumps and pipelines eats away at capacity. The sanctions on Iran will
almost certainly be tightened when the current waivers expire in May, reducing its output further.
So you have to assume that OPEC+ output will come down by something close to the promised 1.2
million barrels a day over the early part of next year, even if the target isn’t reached on Jan. 1.
Surprise Surge
U.S. oil production grew much more than expected over the summer, adding to the over-supply
Source: EIA
Some of the impetus for the sell-off has almost certainly come from revised assessments of U.S.
production. The slide in prices began just after the Department of Energy published its production
numbers for August, which showed a large and unexpected jump in U.S. output.
Conventional wisdom had it that offtake capacity constraints (a lack of pipelines) would limit
production growth until mid-2019. But figures for U.S. oil production in the second half of 2018 have
been revised up by more than 500,000 barrels a day in October and November. Those revisions
certainly helped to turn sentiment bearish and end concerns around a lack of spare OPEC
production capacity.
But those higher production numbers have now been incorporated into supply/demand projections
for 2019. And those forecasts show that, if OPEC+ cuts production as promised, the market will be
just about balanced in the first half of next year.

So what else is driving the pessimism?
Small Expectations
Estimates of global oil demand growth in 2019 have been trimmed since the summer, with some
analysts more pessimistic than the major agencies
Source: Bloomberg
It's starting to look a lot like the market is pricing in a much weaker outlook for demand than is
currently forecast by the main agencies. All three – the U.S. Energy Information Administration, the
Paris-based International Energy Agency and OPEC – have trimmed their oil demand growth
forecasts for 2019. And some consultancies are much more pessimistic. Vienna-based JBC Energy,
for example, now sees growth of less than a million barrels a day next year.
Growing concerns about the health of the global economy, rumbling trade wars, the disruptive effect
of Brexit, the Federal Reserve’s latest rate hike and the threat of a U.S. government shutdown have
all played their part in the slide in prices. Those wider concerns have undermined sentiment across
asset classes and oil has been caught up in the rout.
Lock Step
In contrast to 2014, crude and stock prices are now locked together in a downward spiral
Source: Bloomberg
Note: Data normailized to Jan. 4 2016=100. Scale multiplied by 4 for S&P 500
That suggests that the solution to the current slump lies outside the industry itself. Slashing production may raise prices briefly, but
the higher fuel costs will only add to the negative pressures on the wider economy. If the economic pessimism persists in 2019,
expect oil prices to continue drifting lower as demand forecasts get cut. But if some of those concerns start to ease, the rebound
could be swift.

NewBase Special Coverage
News Agencies News Release 24 December 2018
Global coal demand set to remain stable through 2023, despite
headwinds
While global coal demand looks set to rise for the second year in a row in 2018, it is forecast to
remain stable over the next five years, as
declines in Europe and North America are
offset by strong growth in India and
Southeast Asia, according to the
International Energy Agency’s latest coal
market report, Coal 2018.
Air quality and climate policies, coal
divestment campaigns, phase-out
announcements, declining costs of
renewables and abundant supplies of natural
gas are all putting pressure on coal. As a
result, coal’s contribution to the global
energy mix is forecast to decline slightly from 27% in 2017 to 25% by 2023.
But coal demand grows across much of Asia due to its affordability and availability. India sees the
largest increase of any country, although the rate of growth, at 3.9% per year, is slowing, dampened
by a large-scale expansion of renewables and the use of supercritical technology in new coal power
plants. Significant increases in coal use are also expected in Indonesia, Vietnam, Philippines,
Malaysia and Pakistan.

Coal in China accounts for 14% of global primary energy, the largest around in the world.
Developments in the Chinese coal sector have the potential to affect coal, gas and electricity prices
across the world, for instance through inter-fuel substitution or regional arbitrage. This puts China’s
coal sector at the centre of the global energy stage.
While China accounts for nearly half of the world’s coal consumption, its clean-air measures are set
to constrain Chinese coal demand going forward. We forecast Chinese coal demand to fall by
around 3% over the period.
Meanwhile, in a growing number of countries, the phase out of coal-fired generation is a key policy
goal. But market trends are proving resistant to change.

“The story of coal is a tale of two worlds with climate action policies and economic forces leading to
closing coal power plants in some countries, while coal continues to play a part in securing access
to affordable energy in others,” said Keisuke Sadamori, Director of Energy Markets and Security at
the IEA. “For many countries, particularly in South and Southeast Asia, it is looked upon to provide
energy security and underpin economic development.”
“Tackling our long-term climate goals, addressing the urgent health impacts of air pollution and
ensuring that more people around the world have access to energy will require an approach that
marries strong policies with innovative technologies,” said Mr Sadamori. “It must rely on all available
options – including more renewables, of course – but also greater energy efficiency, nuclear, CCUS,
hydrogen, and more.”
The seaborne coal trade experienced a rebound in 2017
Chinese coal imports grew by 15 Mt in 2017, and most other large importers, including Korea,
Chinese Taipei, Malaysia, Turkey, Philippines, Brazil, Mexico, Vietnam, Pakistan and Morocco had
record imports. Japan, Thailand and Chile were very close to their historical highs. With such
sustained demand, prices remain high.
However higher prices aren’t triggering new investments. Risks associated with climate policy,
potentially stranded assets, local opposition and the memories of the last downturn have cooled
investor appetite to invest in new production.
It appears that banks, insurance companies, hedge funds, utilities and other operators in advanced
economies are exiting the coal business.
A tale of two Europes
accelerating its coal exit - Western Europe is action on climate change and air pollution combined action to specifically
phase out coal-fired power generation, are all impacting coal demand. Along with the expansion of renewables, these
policy efforts will eventually push coal out of the Western European power mix.
By contrast, most countries in Eastern Europe have not announced phase-out policies
and a handful of new coal power plants are under construction in Poland, Greece and

in the Balkans. Some countries in Eastern Europe are among the few places in the
world where lignite remains the cornerstone of the electricity system.
Blue skies in China?
Environmental policies, and in particular clean-air measures, are set to constrain coal demand in
China. Yet for now, one out of every four tonnes of coal used in the world is burned to produce
electricity in China.
This makes China power sector the largest user of coal in the world by far, and as such, any
fluctuation in China’s domestic power system can push global coal demand up or down significantly.
For example, if power demand in China remains stable, global coal demand is set to decline more
than 1% per year. But with power demand growth of 10% – similar to the first decade of this century
– global coal demand would grow over 3% per year.
Or, with annual growth in hydro output in China of about 1.5%, global coal demand grows at 0.2%
per year. But 10% annual growth in hydro output would lead to a decline in global coal demand.
As another example — a shutdown in 2017 of small boilers in China, owing to clean air policies,
triggered gas demand in China which in turn pushed up LNG prices in China and around the world.
Given that coal in China is the largest single source of primary energy in the world by far, the
interlinkage between fuels and geographies sets Chinese coal in the centre of the energy stage.

Coal's engines of growth
Meanwhile, the unmatched period of coal power generation growth in India is set to continue, having
grown continuously since 1974. With the Indian economy expected to grow over 8% per year to
2023 and the electrification process continuing, power demand is forecast to rise by more than 5%
per year over the period.
South and Southeast Asia are the second engine of growth.
Indonesia, Pakistan, Bangladesh, Philippines and Vietnam have more than 800 million people
combined, yet their average annual per capita electricity consumption is just one seventh of that in
Europe. Increasing coal power generation, supported by new coal plants under construction, will be
the main driver of coal demand growth in those countries.

Uncertainty for future demand
Over the past few years, uncertainty has been a major feature of the import forecast – for example
imports to China have been swinging wildly from year to year. Forecasts for India are also uncertain
because imports are used to balance a much bigger domestic market, with both coal production
and demand growing significantly.
Despite this uncertainty, Colombia and South Africa have proved over the years that exports are
more the result of domestic circumstances than the market conditions. Meanwhile, most producers
in Australia and Russia are also well placed with expansion in export capacity. In the case of
Indonesia and United States, we see many producers on the right side of the supply curve. This is
confirmed by the price sensitivity of exports from both countrie
9999999

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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 28 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE operations
base , Most of the experience were spent as the Gas Operations Manager in
Emarat , responsible for Emarat Gas Pipeline Network Facility & gas
compressor stations . Through the years, he has developed great experiences
in the designing & constructing of gas pipelines, gas metering & regulating
stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas
transportation, operation & maintenance agreements along with many MOUs for the local
authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE
and Energy program broadcasted internationally, via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase December 2018 K. Al Awadi

New base energy news 24 december 2018 no-1220 by khaled al awadi

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