- Iraq's oil exports in December are rising to record levels, averaging over 2.6 million barrels per day from southern terminals according to shipping data. Exports could rise further if figures from northern Iraq are included. - The GDF Suez power and water plant in Mirfa, UAE is scheduled to begin construction in February 2015, with the goal of being completed by 2017. It will generate 1,600 megawatts of electricity and produce 52.5 million gallons of desalinated water per day. - The Mirfa plant will use reverse osmosis desalination technology and is an important project for meeting the UAE's growing demands for electricity and water, which are expected to double by 2020

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NewBase 28 December 2014 - Issue No. 506 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Iraq crude exports rise in December to hit record
Reuters + NewBase
Iraq’s oil exports are rising in December towards a record high, according to loading data and
industry sources, as Opec’s second-largest producer pumps more despite oil prices trading near a
five-year low.
The increase will add to ample supplies and may worry other members of the Organisation of the
Petroleum Exporting Countries unable to expand exports and suffering a drop in oil income after a
near 50% drop in prices since June.
Exports from Iraq’s southern terminals have averaged at least 2.60mn bpd, according to shipping
data for the first 23 days of December tracked by Reuters. Two industry sources who monitor the
exports had similar estimates.
“This is looking very strong - massive volumes,” said an industry source, who saw southern flows
rise as high as 2.80mn bpd for part of the month. The southern oilfields produce the bulk of Iraq’s
oil and the terminals are its main outlet to world markets. Located far from the parts of the country
controlled by Islamic State, they have kept pumping despite the unrest.
In addition, flows of Kirkuk crude out of the Turkish port of Ceyhan have returned in December,
after Baghdad reached a deal with the Kurdistan Regional Government. Iraq’s State Oil Marketing
Organisation, or SOMO, has been exporting about 180,000 bpd of Kirkuk so far in December, two

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industry sources said. The oil is being exported in a Kurdish pipe to Ceyhan as an older line has
been repeatedly attacked.
“It is all going through the Kurdish line now,” said a trade source with a company that buys Iraqi
crude. “The old Kirkuk pipeline is not usable.” That brings pipeline exports of Iraq’s main crudes to
around 2.78mn bpd - close to the 2.80mn bpd record high posted in February, just before flows
from Iraq’s Kirkuk fields along a pipeline running to Ceyhan were halted by a bomb attack.
Northern exports may be higher if crude produced in the Kurdistan region and being shipped to
Ceyhan is included, the sources said. Exact figures are not available, but one source said total
shipments from northern Iraq were now at least 300,000 bpd.
The southern export rate is in line with comments from the head of SOMO, Falah Alamri, who said
on December 21 he expected at least 2.60mn bpd. If sustained, December’s southern exports will
exceed May’s 2.58mn bpd, which was the highest since at least 2003.
Iraq aims to push exports even higher in 2015. Oil Minister Adel Abdel Mehdi said in November he
expected shipments to rise next year to an average of 3.2mn bpd, including Kurdistan. The plan
has caused unease for other Opec members and entrenched the reluctance of some to cut their
own supply, according to comments from oil ministers and Opec delegates made during Opec’s
November 27 meeting.
Iraq, however, has argued it should be exempt from Opec supply restraint as it is recovering from
years of sanctions and war. It has been expanding production in the south since Western
companies signed service contracts with Baghdad in 2010.
Smooth progress is not guaranteed. Iraq has missed its targets to expand supplies in the past and
exports are often disrupted by bad weather and technical problems, as well as by unrest.
Northern exports of Kirkuk crude had been shut since March since the bomb attack, keeping total
Iraqi exports below their potential for much of 2014. Still, Kurdistan began independently exporting
crude to Ceyhan in May, angering Baghdad which claimed sole authority to ship oil from the
country.

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Mirfa power and water plant to begin construction in February
The National + NewBase
GDF Suez will break ground in February on its billion-dollar Mirfa gas-fired power and water
project, expected to provide enough electricity for more than 1 million homes once complete, the
French energy firm said.
Mirfa is a key component of Abu Dhabi’s efforts to ramp up power and water output amid a
reduction in subsidies to quell growing demand. From January 1, higher energy and water tariffs
will be introduced in the emirate, expected to lead to a reduction in consumption.
According to Marie-Ange Debon, the deputy chief executive and head of international activities at
the utility unit Suez Environnement, the plant could be finished in 2017, as it “usually takes two
years” from the start of construction. The project, located 120 kilometres west of the capital, will
cost US$1.5 billion and generate 1,600 megawatts of electricity, with a seawater desalination
capacity of 52.5 million gallons per day.
“It took time for the final decision and we were granted the project about six months ago, so now
we’re really in the process [of getting construction underway],” she said, adding that the
engineering and procurement of the desalination plant had already begun. The emirate is
augmenting natural gas-fired plants such as Al Mirfa with four nuclear reactors, built by the Korea
Electric Power Corporation, and a renewable energy portfolio.
Official estimates put peak demand for electricity supplied by the Abu Dhabi Water and Electricity
Authority (Adwea) at more than 13,000MW last year, rising to about 19,000MW in 2017, when the
first reactor comes online. By the end of last year, capacity was about 14,400MW.
The new plant will replace an existing 200MW plant that caters to local demand in Mirfa. Suez
said in October that the desalination part of the project, which includes the design and
construction of the plant, plus a seven-year operating contract for its Degremont unit, is worth
Dh677 million.
The Mirfa desalination plant will use reverse osmosis, which removes salt and algae from
seawater by using membranes and is cheaper than the other two main types of desalination used
in the region – multi-stage flash and multi-effect distillation.
Suez is one of the largest desalination plant operators in the world. It built and operates the
reverse osmosis plant at the Fujairah 1 independent water and power plant – the largest of its type
in the region. Fujairah 1 deploys a hybrid of reverse osmosis and multi-stage flash distillation. As

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the Mirfa deal shows, the reverse osmosis technology continues to gain ground against other
desalination systems and now accounts for the bulk of new projects in the Arabian Gulf region.
GDF Suez, the largest shareholder in Suez Environnement, signed a 25-year power and water
purchase agreement with Adwea in July and reached financial close in October. Adwea holds an
80 per cent stake in the scheme, with the remainder held by the French company.
“[The Mirfa project] is an important addition to the sector and once completed will play a key role
in delivering power and water competitively to meet Abu Dhabi’s growing electricity and water
demand,” Faris Al Dhaheri, the Adwea director general, said in October.
The UAE is looking to tackle its growing water and power demand with rates expected to double
by 2020. The country has one of the highest per capita consumption rates in the world for both
water and electricity. According to the UAE State of Energy Report 2015, residents use about 550
litres of water and 20-30 kilowatt-hours of electricity a day compared to the international average
of 170-300 litres and 15 kWh per day.
The need for water and electricity continues to grow across the region. Suez Environment
believes the GCC is a growth area for the company in the upcoming year, amounting to 5 per cent
of its project portfolio. Ms Debon added it would all depend on the visibility on the outlook of the
economy. “The economy today is not as good as it was, but I still believe that the fundamentals
are very strong.”
The price of Brent crude has fallen almost 50 per cent since peaks in June, and there are
concerns that investment in the energy sector will follow suit. However, Suez Environnement
remains bullish and said the drop in prices has helped business.
The company uses oil in various operations. “Oil companies need companies like us to treat the
water that is extracted from wells and reservoirs. Even if oil prices are weak, the need for
treatments of produced water will remain very high,” Ms Debron said.
Most recently the company was awarded an Dh814.9m contract for the expansion of the Doha
West wastewater treatment and recycling plant. The executive added that there were still several
projects, mostly revolving around water activities, that were on the books.
“The only way to meet the demand is to work,” she said. “We remain at a good level of growth in
the region.”

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US:Rail deliveries of U.S. oil continue to increase in 2014
Source: U.S. Energy Information Administration, based on Association of American Railroads
The amount of crude oil and refined petroleum products moved by U.S. railroads increased 9%
during the first seven months of this year compared with the same period in 2013. In July, monthly
average carloadings of oil and petroleum products were near 16,000 carloads per week,
according to the Association of American Railroads (AAR).
The increase in oil volumes transported by rail reflects rising U.S. crude oil production, which
reached an estimated 8.5 million barrels per day in June for the first time since July 1986. AAR
estimates that more than half of the nearly 460,000 carloads tracked in its petroleum and
petroleum products category from January through July consisted of crude oil, up from around 3%
in 2009.
With the average rail tank car holding around 700 barrels of crude oil, about 759,000 barrels of
crude oil per day were moved by rail during the first seven months of 2014, equal to 8% of U.S. oil
production.
The Bakken Shale, primarily in North Dakota, has provided a significant share of the total increase
in U.S. oil production over the past three years. North Dakota, now the second-largest oil
producing state, provides nearly one out of every eight barrels of oil produced in the United
States. Between 60% and 70% of the more than 1 million barrels per day of oil produced in the
state has been transported to refineries by rail each month in the first half of 2014, according to
the North Dakota Pipeline Authority.

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In the future, proposed rules published in August by the U.S. Department of Transportation to
improve the safety of tank cars will affect how crude oil is moved by rail, particularly trains that
carry 20 or more carloads of oil. The proposed rules would require new oil tank cars constructed
after October 2015 to have thicker steel and require retrofitting of existing tank cars. Voluntary
actions by railroads in anticipation of the new rules have resulted in reduced speeds and
increased inspections.
Oil companies are turning to rail deliveries as North American oil production overwhelms
existing pipeline capacity. Provided the U.S. government approves Keystone XL, it will be at
least two more years before 1,000,000 barrels of oil per day in extra pipeline capacity comes on
stream for U.S. refiners.
In Canada, opposition to the Northern Gateway pipeline from the provincial government in
British Columbia means an uncertain future for the 525,000 bpd project planned by Enbridge.

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Oil Price Drop Special Coverage
Oil Caps Fifth Weekly Loss on Global Supply Glut Concern
Bloomberg + NewBase
Oil fell, capping a fifth weekly loss on concern that OPEC’s refusal to cut production will worsen a
global supply glut.
Brent and West Texas Intermediate extended their annual declines of more than 40 percent, the
biggest since 2008, as the Organization ofPetroleum
Exporting Countries resisted supply cuts to defend
market share while the highest U.S. production in three
decades exacerbated a global glut. Trading volume
headed for the lowest this year.
“The market is still reeling from oversupply,” saidPhil
Flynn, senior market analyst at the Price Futures Group
in Chicago. “It’s really hard to muster a substantial rally
until we figure out how we are going to use all this oil.”
Related: Saudi Arabia Seen by Former Adviser Assuming $80 Oil
Brent for February settlement slipped 79 cents, or 1.3 percent, to $59.45 a barrel on the London-
based ICE Futures Europe exchange, down 3.1 percent this week. The volume of all futures was
84 percent below the 100-day average as of 3:10 p.m., with much of Europe on holiday after
Christmas.
West Texas Intermediate crude for February delivery fell $1.11, or 2 percent, to $54.73 on
the New York Mercantile Exchange with volume 68 percent below average. Prices were down
3.2 percent this week. Trading reached 174,562 contracts at 2:49 p.m. The previous lowest
volume this year was 244,240 on Aug. 25. Brent traded at a premium of $4.72 to WTI on the ICE.
Crude Stockpiles
Both grades gained more than 1 percent earlier on fighting in Libya and on a report that Saudi
Arabiaexpects prices to rise. The state-run National Oil Corp. said today that several tanks were
on fire at the Es Sider terminal as Islamist militias attacked Libya’s largest petroleum port. Saudi
Arabia, OPEC’s biggest producer, is assuming an oil price of $80 a barrel for 2015, said John
Sfakianakis, a former economic adviser to the country’s government.
U.S. crude stockpiles climbed 7.27 million barrels in the week ended Dec. 19, the most in two
months, the Energy Information Administration said Dec. 24.
The gain left U.S. crude stockpiles at 387.2 million barrels, the highest level since June, according
to data from the EIA, the Energy Department’s statistical arm.

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OPEC, whose 12 members supply about 40 percent of the world’s oil, decided at a Nov. 27
meeting to maintain its production target at 30 million barrels a day. The group pumped 30.56
million barrels a day in November, exceeding its target for a sixth straight month, a Bloomberg
survey of companies, producers and analysts shows.
Getting Worse
“We are still in a state of oversupply,” said Tom Finlon, Jupiter, Florida-based director of Energy
Analytics Group LLC. “The disruption in Libya may contribute to Brent’s stabilization in the near
term.”
The fighting in Libya caused crude output to decline to 352,000 barrels a day, Mohamed Elharari,
the company’s spokesman, said yesterday. That compares with daily production of almost 1.6
million in 2011.
Libya's Breakdown
“Disruption to Libya’s oil production helps Brent to stay up and helps WTI to stay up too,” said Carl
Larry, a Houston-based director of oil and gas at Frost & Sullivan. “We are seeing a little bounce
back. The only thing we need to fear is profit-taking when prices go up.”
Retail prices for regular gasoline at the pump were below $2 a gallon at about 20,000 stations in
the U.S. today, according to AAA. The most common price was $1.999. Retail gasoline averaged
$2.324 nationwide yesterday, a five-year low, AAA said.
Oil prices fell Friday, tumbling as the dollar strengthened and as a supply glut in top consumer, the
United States, trumped worries about falling production from Libya.
The market had come under pressure from Wednesday's Energy Department report, which
showed a 7.3 million-barrel rise in crude inventories to their highest December level on record.
Analysts had expected a seasonal decline.
The slide was exacerbated as oil prices reacted to a strengthening dollar index.
"There's still significant weakness in confidence, and that means that we're going to have
occasional retests to the downside," said Richard Hastings of Global Hunter Securities. The
strengthening dollar index triggered the slide on Friday, he said.

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Additionally, the market continued to reel from bearish storage data just before the Christmas
holiday.
"The numbers on Wednesday were really bearish, and it's possible the market is still trying to
digest them," said Andrew Lebow, a Senior Vice President of Jefferies in New York. "Maybe the
path of least resistance is down here, given that we've been in a long down trend."
Crude imports by Japan, the world's fourth-biggest oil buyer, dropped 17.3 percent in November
from a year earlier to 14.68 million kilolitres (3.08 million bpd), government data showed on
Thursday.
Brent crude settled down 79 cents at $59.45, while U.S. crude fell $1.11 to $54.73 in thin trade as
many countries were still on holiday.
"We tried to rally off of the Libyan situation, but I think that the market is still reeling from larger-
than-expected inventory data," said Phil Flynn of Price Futures Group in Chicago.
Fighting in Libya has cut output there to 352,000 barrels a day, or about half November's average,
state oil company spokesman said on Thursday. This countered the US Department of Energy's
(DOE) report showing a big stockbuild.

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NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Your Guide to Energy events in your area

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Your partner in Energy Services
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
MSc. & BSc. Mechanical Engineering (HON), USA
ASME member since 1995
Emarat member since 1990
Mobile : +97150-4822502
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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 28 December 2014 K. Al Awadi

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