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NewBase 26 January 2014 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
High hopes for Masdar go-ahead on Nour 1 solar plant
April Yee , http://www.thenational.ae
Like a windscreen wiper on steroids, a slim machine whisks across the sand-dusted solar panels
and leaves in its wake a sparkling surface ready to absorb the sun’s energy.
The cleaning robot – essentially an industrial Roomba, or domestic robot vacuum cleaner, for
solar panels in the desert – was being demonstrated to crowds at last week’s World Future
Energy Summit as the latest tool in the US solar company SunPower’s arsenal for getting ahead
in a long-anticipated bid.
Industry insiders are optimistic that in the next few months Abu Dhabi’s Executive Council could
give Masdar the green light to build Nour 1, a 100-megawatt photovoltaic plant for which
companies first bid in 2011.
The wait for the project has gone on so long that Dubai has since stolen the distinction of having
the Middle East’s biggest solar panel plant, and companies even began planning for a never-
announced successor that they dubbed Nour 2, a natural stepping stone to Abu Dhabi’s ambitious
target of sourcing 7 per cent of its power from renewables by 2020.
But the delay could work to Abu Dhabi’s advantage thanks to declines in the cost of solar energy:
in three years’ time, the cost of the average solar panel has fallen by 60 per cent.
“Solar energy is making huge progress, decreasing its costs, increasing its competitiveness, so
that market potential for solar is now improving a lot in many countries in the Middle East,
potentially in every country in the Middle East,” said Bernard Clement, the senior vice president of
new energies for Total, which owns 66 per cent of Sunpower. “Solar projects have one benefit:
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they are in general easier to develop than, say, oil and gas, so you don’t need a lot of preparation,
you just have to be ready from a technical point of view.”
Abu Dhabi has a number of factors to consider, including lessons learnt through a disappointing
investment in Solyndra, the US company that filed for bankruptcy in 2011, and delays in bringing
online Shams 1, a 100MW solar thermal array. Solar mirrors there generate power by heating oil
to make steam to drive electricity turbines rather than by directly producing power as in
photovoltaic panels.
Gulf countries seem to have decided to forgo subsidies for renewables and let them compete
head to head with natural gas and nuclear, said Joe Kishkill, the chief commercial officer of First
Solar, which built Dubai’s 13MW solar panel plant.
“I think we’re close enough on cost today,” he said. “You can install a solar plant just on the
amount of liquid fuels you’d save.”
At a logistical level, Abu Dhabi may also need to make sure its power grid is ready to take on new
supply, said Mohammed Atif, the area manager for DNV GL’s energy advisory.
“It’s probably more a practical issue,” he said.
“I would suspect what AD is waiting for is it’s waiting for the right time to add that capacity to
manage that demand.”
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Oman, Spanish firms launch JV for $200m pipeline
By Andy Sambidge , http://www.arabianbusiness.com/
Oman Oil Refineries and Petroleum Industries Company (ORPIC) and Spanish company Compania
Logistica de Hidrocarburos, have launched a joint venture to build a 280km pipeline project.
The Orpic Logistics Company (OLC) has been established to construct the Muscat-Sohar Product Pipeline
(MSPP) which also includes a terminal and a direct pipeline link from Jifnain to Muscat International
Airport. A total of $200m will be invested in the project. MSPP will be one of three major projects to be
started - the others being the Sohar Refinery Improvement Project and the Liwa Plastics Project, a statement
carried by Oman Press Agency said.
"This is a significant project on a number of levels," said Musab al- Mahrouqi, ORPIC CEO. "As a multi-
product pipeline it is a first for Oman, a complex transportation system that will have a positive impact for
the business overall and specifically in environmental issues.
"The Jifnain terminal is a strategic storage facility, capable of responding to emergency situations should it
be necessary. And the direct link to the new airport will mean that aircraft will be refuelled through a closed
system, guaranteeing a continuous flow 24 hours a day, rather than having to use fuel tankers.
"We strongly believe that
this project is strategically
important for Oman." The
pipeline will transport four
types of fuel, premium and
regular gasoline, diesel and
jet A1 for aircraft, using a
computer controlled
buffering system to
separate product streams.
He said the project will
bring significant
environmental benefits, particularly in Muscat. The new pipeline will reduce traffic on the roads in Muscat
and up to the Al Batinah, while tanker numbers will be reduced by 70 percent. OLC is scheduled to
complete the pipeline connection between Mina Al Fahal Refinery and the airport in 2016.
Oil Minister H E Dr Mohammed al Rumhi
and CLH chairman José Luis
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CLH CREATES A JOINT VENTURE WITH ORPIC FOR THE CONSTRUCTION
AND OPERATION OF NEW LOGISTICS INFRASTRUCTURES IN OMAN
Compañía Logística de Hidrocarburos CLH, S.A. has signed an agreement with the Omani company Oman Oil
Refineries and Petroleum Industries Company (ORPIC) for creating a joint venture that will invest 200 million dollars
in the construction and operation of new logistics infrastructures in Oman.
During the contract signing ceremony, which was held today in Muscat, the Chairman of CLH, José Luis López de
Silanes, emphasized that "this operation is the first international investment made by the company in its history of
more than 85 years and is the result of the company's interest in fostering the internationalisation of its activities, and
the prospects for growth of the oil sector in Oman, where CLH has an important reference shareholder to guarantee
the success of this project".
Musab Al Mahruqi, the CEO of Orpic, said that “this is a significant project on a number of levels. As a multiproduct
pipeline it is a first for Oman, a complex transportation system that will have both business and environmental impact.
The Jifnain terminal is a national strategic storage facility, capable of responding to emergency situations should it be
necessary. And the direct link to the new airport will mean that aircraft will be refueled through a closed system, rather
than having to use fuel tankers. We strongly believe that this project is important for Oman and
Orpic”.
The new company, in which CLH and ORPIC will hold a 40% and 60% stake, respectively, will be called Orpic
Logistics Company (OLC) and it will be responsible for the construction and management of a storage plant in the
vicinity of Muscat, the capital of Oman, and a multi-product pipeline network that will connect the new storage plant to
the two refineries existing in the country and with Muscat International Airport.
The new pipeline network will have a total length of 290 kilometres and will make it possible for more than 5.4 million
cubic metres to be transported. It will also be reversible, meaning that a highly flexible logistics system will be
provided. The development and start-up of the infrastructures will be gradual. The first section of this pipeline network
will consist of building the connection between the refinery in Muscat and the international airport, and is expected to
become operational during the first half of 2016.
On the other hand, the new storage plant will have an operating capacity of more than 170,000 cubic metres and will
be fitted with 18 loading racks for expediting supply to the various distribution companies operating in Oman, and is
expected to become operational in the first half of 2017, as is the pipeline for connection with the Sohar refinery.
The building of these new infrastructures, in which CLH's broad experience in managing these types of logistics
systems will be applied, will bring significant benefits to Oman, as it will permit increased security of oil product
supplies and will reduce the use of tank trucks for transporting fuels by road. Besides this, it will mean that the costs of
oil product transportation and distribution in the country can be optimised.
For CLH, the development of this project represents an important first step in the internationalization process forecast
in the Strategic Plan 2012-2016, the aim being to achieve greater diversification of its activities and to develop new
business opportunities.
CLH AND ORPIC
Compañía Logística de Hidrocarburos CLH is the leading company in the Spanish market for the transportation and
storage of oil products, with a pipeline network more than 4,000 kilometres long, and 39 storage facilities, with a total
capacity of 7.9 million cubic metres, in addition to 28 airport facilities.
ORPIC (Oman Oil Refineries and Petroleum Industries Company) is one of the leading companies in Oman and has
two refineries in that country, in Sohar and Muscat. ORPIC is owned by the Government of the Sultanate of Oman
and Oman Oil Company SAOC, the trading company created by the Government of the Sultanate of Oman for
managing investments in the energy sector. This latter company has also been a CLH shareholder since 2003 and
holds a 10% stake in the capital.
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ChemaWEyaat and Indorama sign for Madeenat Aromatics project
http://www.2b1stconsulting.com/chemaweyaat-and-indorama-sign-for-madeenat-aromatics-project/
The Thai chemical company Indorama Ventures (Indorama) and the local Abu Dhabi National Chemicals
Corporation (ChemaWEyaat) signed an agreement to establish the joint venture Abu Dhabi Chemicals
Integration Company (Tacaamol) to design and build the first phase of the Madeenat ChemaWEyaat Al
Gharbia (MCAG) project in the Western Region of Abu Dhabi, along the boarder of Saudi Arabia.
For some years, the Emirates of Abu Dhabi
is working to balance its upstream activities
with the added value generated by the
downstream sector in expanding its
petrochemicals capacities.
In 2008, Abu Dhabi Emir established
ChemaWEyaat as a joint venture between
Abu Dhabi National Oil Company
(ADNOC), the Abu Dhabi Investment
Council and the International Petroleum
Investment Company (IPIC) in order to
channelize the best resources from the
upstream side toward the
petrochemical sector.
At that time Abu Dhabi was targeting to
invest up to $25 billion capital expenditure in the giant Madeenat ChemaWEyaat Al-Gharbia Master
Planning project.
As Tacaamol means integration, Abu Dhabi has conceived the Madeenat ChemaWEyaat Al-Gharbia Master
Planning project as an integrated petrochemical complex similar to Sadara in Saudi Arabia.
If integration favors the process optimization and related costs, it also adds complexity in the design and
construction pushing forward the expected date of first production.
So ADNOC and IPIC decided to split the
Madeenat ChemaWEyaat Al-Gharbia Master
Planning project in three phases.
As a first phase, the Madeenat
ChemaWEyaat Al-Gharbia (MCAG) project
should require $10 billion capital expenditure.
This first phase MCAG will itself be also
phased up in a manageable way and in respect
with the different partnerships required by
ChemaWEyaat to licence the best processes
with international chemical companies.
In that respect the agreement signed between Indorama and ChemaWEyaat to create the joint venture
Tacaamol is providing the first stone to the MCAG project.
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Foster Wheeler won PMC for Tacaamol Aromatics
http://www.2b1stconsulting.com/
In this Tacaamol joint venture, ChemaWEyaat and Indorama will share the working interests such as:
- ChemaWEyaat 51% is the operator
- Indorama 49%
For this first phase of the MCAG project, ChemaWEyaat and Indorama intends to build through their
Tacaamol joint venture an aromatics plant including:
- 1.4 million tonnes per year (t/y of paraxylene (PX)
- 500,000 t/y of benzene.
- Petrochemicals tank farm
- Export jetty
In 2012, ChemaWEyaat had selected Foster Wheeler to provide the project management consultancy (PMC)
services for the MCAG project.
In September 2013, ChemaWEyaat had mandated CH2M Hill to carry out the front end engineering and
design (FEED) work of the Madeenat ChemaWEyaat Al-Gharbia project.
With Indorama joint venture, ChemaWEyaat is partnering with a polyester global leader producing PET and
PTA all over the world.
ChemaWEyaat and Indorama are planning to invest $1 billion capital expenditure in this
Tacaamol Aromatics project as a first phase of the Madeenat ChemaWEyaat Al-Gharbia (MCAG) project to
come on stream in 2020 .
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Sarir oilfield attacked, power lines cut
http://www.libyaherald.com/ By Jamal Adel.
The Sarir oilfield was attacked by an armed group this evening and, during clashes with army
units guarding the field, a main power line connecting the Sarir power station to a number of
towns and cities was cut.
Heavy weaponry was used in the attack and missiles were fired into the oilfield, Saleh Mohammed,
commanding officer for the army’s 25th Brigade, which is responsible for guarding a number of
facilities in the region, told the Libya Herald.
He said that no oil tanks were hit in the clashes, during which army troops were able to repel the
attackers, but that a main power line was cut. This line, he said, carried power into the national
grid, connecting the Sarir power plant with Benghazi and a number of towns including Kufra and
Jalo.
The attack is thought to have been part of ongoing clashes in the region between the Zwai and
Tebu tribes. These have been destabilising the area and led, on Monday, to workers evacuating the
Sarir power plant, leading to its temporary closure.
Earlier today, Fraj Bu-Jufool, the head of the self-named ‘Operation Room for the Liberation of
the South’ – an armed group from the local Zawi tribe – announced that he, along with another
group called 427 Brigade, had liberated the Sarir and Messla oilfields.
This was denied by spokespersons for the army units at the two oilfields. It now appears that when
Bu-Jufool made the announcement, his forces were actually preparing for this evening’s attack.
It is believed that the attackers were from the same armed group which attacked Sarir farm – an
agricultural project north of Kufra – on 21 December.
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Kuwait's refineries still not at full production
http://www.tradearabia.com/news/OGN_250529.html
The largest of Kuwait's three oil refineries was fully operational on Friday after a power cut shut all of them in the
week, but the other two are still not at full production, a spokesman said.
The 460,000-barrels-per-day (bpd) Mina Ahmadi refinery was working at 100 per cent early on Friday, a spokesman
for the Kuwait National Petroleum Company (KNPC) said. The 270,000-bpd Mina Abdullah and 200,000-bpd
Shuaiba refineries were working at around 60 per cent and are expected to be fully operational by Saturday, the
spokesman added.
The three refineries, built next to each other on the Gulf coast south of the capital, were shut down by a power outage
on Wednesday and have been slowly restarted by KNPC. OPEC member Kuwait has been using its reserves to
prevent a disruption to exports. Power cuts often occur in Kuwait because of its outdated and unstable electricity
supply system.
Kuwait's Mina Al Ahmadi refinery
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UK Offshore oil and gas licensing round begins
by PERRY GOURLEY , http://www.scotsman.com/business/energy/
THE UK government has launched the latest licensing round for drilling for offshore oil and gas amid what
it described as “high interest” from companies in exploring. Ministers said around 20 billion barrels of oil
could still be buried in the seabed and that applications by explorers under the round will help unlock its
economic potential.
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A record number of licences were awarded in the previous round, including 21 new entrants, taking the total
number of companies working in the North Sea to 50. Energy minister Michael Fallon said: “This new
round of drilling for offshore oil and gas will help boost growth, energy security and jobs in the UK. The
licensing of new areas forms an essential part of our long term economic plan by enabling the exploration
necessary to ensure we fully realise our remaining reserves.”
Last year, 36 offshore projects were approved under the previous round. Applications for the 28th licensing
round have to be submitted by 25 April. The government said after reviewing the conclusions of an
environmental report, a number of blocks in the deepest waters off the south-west of England are currently
not being offered as part of the round because of lack of data over the marine environment there .
A number of blocks excluded from earlier licensing rounds, including ones in the Moray Firth, have again
been omitted for environmental reasons. UK oil and gas output has been in steady decline since production
peaked around the turn of the century and the government is speeding up its planning regime to help oil and
gas companies extract resources left below the seabed.
Announcing the licensing round, the government highlighted the contribution of oil and gas industry to the
economy. The offshore projects approved last year generated around £6.5 billion in tax revenue and another
£5bn through taxes on the wider supply chain, the government said. The sector also employs roughly
350,000 people, of which 45 per cent are in Scotland. Current forecasts for the next five years show a need
for an additional 15,000 employees.
But WWF Scotland director Lang Banks said: “Given all the tax breaks provided for decommissioning old
rigs and encouraging exploration in once-unviable areas, it’s hardly surprising that there’s so much interest
by companies in even more oil and gas drilling in the North Sea. “However, given the urgent need to reduce
our climate emissions, we urgently need to see ministers set out a clear plan to move us away from fossil
fuels.”
The government is also counting on vast onshore shale gas resources to help stem the UK’s growing
dependence on energy imports and boost government coffers. The UK’s next onshore licensing round,
which includes shale gas, is expected to be launched in early summer.
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World buyers line up to buy U.S. natural gasREUTERS :- BY OLEG VUKMANOVIC AND EDWARD MCALLISTER
Countries across the world have been quietly signing deals in recent months to import natural gas
from the United States, revealing a growing appetite for the fuel overseas as domestic output
soars.
Up to a dozen long-term deals, each worth billions of dollars, have been penned behind closed doors with
companies in China, Japan, Taiwan, Spain, France and Chile as global demand spikes, according to
company, industry and trade sources. Through the agreements, China in particular has emerged as one of the
biggest beneficiaries of cheap American natural gas that in the coming years will be piped to Gulf Coast
plants and liquefied for shipment abroad in tankers.
The unannounced deals, which amount to about 2 percent of daily U.S. supply, are not the first of their kind,
and they depend on U.S. government approval to construct two new liquefied natural gas (LNG) plants. But
the number of new buyers, and their global scope, show how the United States is taking steps to becoming a
major export hub by stealing ahead of rivals in Australia and East Africa, successfully wooing needy Asian
buyers even before projects begin construction. Global competition may squeeze profit margins on some
exports of U.S. gas.
Companies like Britain's BP (BP.L) and France's GDF Suez (GSZ.PA), already committed to taking LNG
from the United States, are now finding multiple buyers willing to take tranches of supply. "As we see more
contracts getting signed, it's an indication that the U.S. has really cheap natural gas that will help supply the
global market," said Jason Bordoff, Director at the Center on Global Energy Policy at Columbia University.
The United States is producing record amounts of natural gas thanks to a drilling boom, and more than a
dozen export projects have been proposed. But large domestic users of natural gas such as the petrochemical
industry are worried that unfettered exports could push prices higher at home. The Obama administration
has been approving exports on a case-by-case basis. So far, only four projects are allowed to export across
the globe and only one is under construction.
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Cheniere Energy's (LNG.A) Sabine Pass project in Louisiana, expected to begin shipments late in 2015, has
sealed deals with importers in Europe and Asia over the past two years. This latest batch of gas sales will be
exported from Sempra Energy's (SRE.N) Cameron LNG plant in Louisiana and the Freeport LNG plant in
Texas, sources said. Both plants are expected to begin operations by the end of the decade, pending
approvals.
Sempra is still waiting on permits to construct the Cameron plant, and to export the gas to countries with
which the U.S. does not have a free trade agreement. Freeport has full export approval, but is yet to begin
construction.
THE DEALS
Securing buyers early can make or break an LNG project. Without buyers, a project will not receive
financial backing or be built. GDF Suez, which acquired export rights at Cameron last year, has agreed to
sell all of its 4 million tonnes per year of capacity to buyers in Japan, Taiwan, China and Chile, according to
a review of deals confirmed by industry sources.
Japan's Mitsubishi (8058.T) and Mitsui (8031.T), also with export rights at Cameron, have separately
targeted major buyers such as Spain's Repsol (REP.MC), France's Total (TOTF.PA) and Japanese utilities.
Mitsubishi is to sell a significant chunk of LNG to its own trading arm in Singapore. Sources said Japanese
buyers were reluctant to commit to large deals while the fate of its nuclear fleet remained uncertain after the
2011 Fukushima disaster. Mitsubishi is also in talks with Indian Oil Corp. (IOC.NS) to sell 1 mtpa of LNG
for its planned terminal at Ennore in southern India, a company executive said. Exact volumes may be
adjusted.
Sempra hopes to make a final investment decision to build the Cameron plant later this year. Once that
decision is made, the deals agreed by GDF Suez, Mitsui and Mitsubishi automatically become formal sales
agreements, industry sources said. The San Diego-based company expects to win export approval from the
U.S. Department of Energy before April.
Meanwhile, BP is in talks to export LNG from the Freeport plant to China National Offshore Oil
Corporation (CNOOC), giving the British company a foothold in the world's largest energy consumer. This
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and older deals with other exporters will soon make China one of the largest importers of U.S. gas. BP has a
further deal to supply Japanese utility Tepco with 0.5 mtpa, sources said. BP declined to comment. Mitsui
and its prospective Japanese utility customers Kansai Electric and Tohoku Electric also declined comment.
More than 12 million tonnes per year (mtpa) of LNG would be exported from the United States under the
deals, or around 1.5 billion cubic feet per day of gas, though some volumes may alter in final negotiations,
sources said. U.S. daily production is about 70 billion cubic feet.
"These deals will send a signal that there is still strong demand for U.S. LNG volumes," said Andres Rojas,
analyst at Waterborne Energy in Houston. GDF was also in talks with Thailand's PTT but these were
abandoned after a failure to agree terms last year, a senior PTT source said. Mitsui also broke off talks with
South Korean importer GS Caltex, a source at the company said.
HARD SELL
Despite these recent deals, sellers have found it harder than expected to find new buyers, and have had to
offer favorable terms when they do. A projected LNG supply spike between 2016-2020 from North
America, Australia, east Africa, Russia and Asia has empowered buyers to push down the price of long-term
deals being negotiated now.
This is partly reflected in the low profit margins U.S. exporters stand to make from many of the recently
concluded agreements. "The United States is not the only gas producer, so we are competing in a market
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with countries like Qatar, Malaysia, Australia and potentially East Africa," Bordoff said. "There is not
infinite demand. There is only so much supply that the global market can take."
In its first long-term LNG deal into Asia, GDF Suez is selling 0.8 mtpa to Taiwan's CPC from 2018 at
barely breakeven levels. According to the price formula reviewed by sources, CPC will pay around $12 per
million British thermal units for the gas in the first year of the contract, a steep discount to the $16 its pays
for LNG prices in Asia linked to oil.
Moreover, America's edge over rivals could easily dim should domestic gas prices rise nearer to pre-shale
boom levels and crude oil prices simultaneously drop to around $80 a barrel. At those levels, LNG deals
linked to oil begin to look globally competitive, handicapping buyers of American gas.
Bearing these risks in mind, buyers nevertheless want limited exposure to U.S. LNG primarily as a way of
negotiating down prices in oil-indexed, long-term contracts with Qatar and Australia.
Commenrtary – Expert , Sustained Growth in Liquefied Latural Gas
Over the past two decades, liquefied natural gas (LNG) has emerged as an increasingly core feature of the global gas
balance, with growth of about 7% per year since 2000. Its contribution to meeting demand for gas has risen steadily to
reach nearly 10% of aggregate gas supply in 2012. This represents production of 240 million tonnes (Mt) (source:
CERA). As the distances between major gas-producing and consuming regions increase, this boom is set to continue
in a very significant manner. By 2020, output is forecast to reach 373 Mt, and LNG should account for 13% of global
gas supply.
In contrast, LNG played only a marginal role in the gas balance of the North American market in 2012. The import
volume of 18.6 Mt of LNG accounted for less than 2% of the aggregate gas demand of this huge market (source:
CEDIGAZ and GIIGNL).
The recent advent of large-scale shale gas production has offset the sharp decline in conventional gas output, sharply
curbing import requirements. This scenario is likely to remain unchanged ten years from now: LNG imports are
estimated at a mere 5 Mt.
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NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Your partner in Energy Services
Khaled Malallah Al Awadi,
MSc. & BSc. Mechanical Engineering (HON), USA
ASME member since 1995
Emarat member since 1990
Energy Services & Consultants
Mobile : +97150-4822502
khalid_malallah@emarat.ae
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 years of experience in theof experience in theof experience in theof experience in the Oil & Gas sector. Currently working asOil & Gas sector. Currently working asOil & Gas sector. Currently working asOil & Gas sector. Currently working as
Technical Affairs Specialist fTechnical Affairs Specialist fTechnical Affairs Specialist fTechnical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation foror Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation foror Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation foror 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 Operationsthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operationsthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operationsthe 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 forManager in Emarat , responsible forManager in Emarat , responsible forManager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developedEmarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developedEmarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developedEmarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developed
great experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of supplyof gas pipelines, gas metering & regulating stations and in the engineering of supplyof gas pipelines, gas metering & regulating stations and in the engineering of supplyof gas pipelines, gas metering & regulating stations and in the engineering of supply
routes. Many yearoutes. Many yearoutes. Many yearoutes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs forrs were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs forrs were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs forrs 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 andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcastedEnergy program broadcastedEnergy program broadcastedEnergy program broadcasted
iiiinternationally , via GCC leading satellitenternationally , via GCC leading satellitenternationally , via GCC leading satellitenternationally , via GCC leading satellite ChannelsChannelsChannelsChannels ....
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase 26 January 2014 K. Al Awadi
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New base special 26 january 2014

  • 1. Copyright © 2014 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 26 January 2014 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE High hopes for Masdar go-ahead on Nour 1 solar plant April Yee , http://www.thenational.ae Like a windscreen wiper on steroids, a slim machine whisks across the sand-dusted solar panels and leaves in its wake a sparkling surface ready to absorb the sun’s energy. The cleaning robot – essentially an industrial Roomba, or domestic robot vacuum cleaner, for solar panels in the desert – was being demonstrated to crowds at last week’s World Future Energy Summit as the latest tool in the US solar company SunPower’s arsenal for getting ahead in a long-anticipated bid. Industry insiders are optimistic that in the next few months Abu Dhabi’s Executive Council could give Masdar the green light to build Nour 1, a 100-megawatt photovoltaic plant for which companies first bid in 2011. The wait for the project has gone on so long that Dubai has since stolen the distinction of having the Middle East’s biggest solar panel plant, and companies even began planning for a never- announced successor that they dubbed Nour 2, a natural stepping stone to Abu Dhabi’s ambitious target of sourcing 7 per cent of its power from renewables by 2020. But the delay could work to Abu Dhabi’s advantage thanks to declines in the cost of solar energy: in three years’ time, the cost of the average solar panel has fallen by 60 per cent. “Solar energy is making huge progress, decreasing its costs, increasing its competitiveness, so that market potential for solar is now improving a lot in many countries in the Middle East, potentially in every country in the Middle East,” said Bernard Clement, the senior vice president of new energies for Total, which owns 66 per cent of Sunpower. “Solar projects have one benefit:
  • 2. Copyright © 2014 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 2 they are in general easier to develop than, say, oil and gas, so you don’t need a lot of preparation, you just have to be ready from a technical point of view.” Abu Dhabi has a number of factors to consider, including lessons learnt through a disappointing investment in Solyndra, the US company that filed for bankruptcy in 2011, and delays in bringing online Shams 1, a 100MW solar thermal array. Solar mirrors there generate power by heating oil to make steam to drive electricity turbines rather than by directly producing power as in photovoltaic panels. Gulf countries seem to have decided to forgo subsidies for renewables and let them compete head to head with natural gas and nuclear, said Joe Kishkill, the chief commercial officer of First Solar, which built Dubai’s 13MW solar panel plant. “I think we’re close enough on cost today,” he said. “You can install a solar plant just on the amount of liquid fuels you’d save.” At a logistical level, Abu Dhabi may also need to make sure its power grid is ready to take on new supply, said Mohammed Atif, the area manager for DNV GL’s energy advisory. “It’s probably more a practical issue,” he said. “I would suspect what AD is waiting for is it’s waiting for the right time to add that capacity to manage that demand.”
  • 3. Copyright © 2014 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 3 Oman, Spanish firms launch JV for $200m pipeline By Andy Sambidge , http://www.arabianbusiness.com/ Oman Oil Refineries and Petroleum Industries Company (ORPIC) and Spanish company Compania Logistica de Hidrocarburos, have launched a joint venture to build a 280km pipeline project. The Orpic Logistics Company (OLC) has been established to construct the Muscat-Sohar Product Pipeline (MSPP) which also includes a terminal and a direct pipeline link from Jifnain to Muscat International Airport. A total of $200m will be invested in the project. MSPP will be one of three major projects to be started - the others being the Sohar Refinery Improvement Project and the Liwa Plastics Project, a statement carried by Oman Press Agency said. "This is a significant project on a number of levels," said Musab al- Mahrouqi, ORPIC CEO. "As a multi- product pipeline it is a first for Oman, a complex transportation system that will have a positive impact for the business overall and specifically in environmental issues. "The Jifnain terminal is a strategic storage facility, capable of responding to emergency situations should it be necessary. And the direct link to the new airport will mean that aircraft will be refuelled through a closed system, guaranteeing a continuous flow 24 hours a day, rather than having to use fuel tankers. "We strongly believe that this project is strategically important for Oman." The pipeline will transport four types of fuel, premium and regular gasoline, diesel and jet A1 for aircraft, using a computer controlled buffering system to separate product streams. He said the project will bring significant environmental benefits, particularly in Muscat. The new pipeline will reduce traffic on the roads in Muscat and up to the Al Batinah, while tanker numbers will be reduced by 70 percent. OLC is scheduled to complete the pipeline connection between Mina Al Fahal Refinery and the airport in 2016. Oil Minister H E Dr Mohammed al Rumhi and CLH chairman José Luis
  • 4. Copyright © 2014 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 4 CLH CREATES A JOINT VENTURE WITH ORPIC FOR THE CONSTRUCTION AND OPERATION OF NEW LOGISTICS INFRASTRUCTURES IN OMAN Compañía Logística de Hidrocarburos CLH, S.A. has signed an agreement with the Omani company Oman Oil Refineries and Petroleum Industries Company (ORPIC) for creating a joint venture that will invest 200 million dollars in the construction and operation of new logistics infrastructures in Oman. During the contract signing ceremony, which was held today in Muscat, the Chairman of CLH, José Luis López de Silanes, emphasized that "this operation is the first international investment made by the company in its history of more than 85 years and is the result of the company's interest in fostering the internationalisation of its activities, and the prospects for growth of the oil sector in Oman, where CLH has an important reference shareholder to guarantee the success of this project". Musab Al Mahruqi, the CEO of Orpic, said that “this is a significant project on a number of levels. As a multiproduct pipeline it is a first for Oman, a complex transportation system that will have both business and environmental impact. The Jifnain terminal is a national strategic storage facility, capable of responding to emergency situations should it be necessary. And the direct link to the new airport will mean that aircraft will be refueled through a closed system, rather than having to use fuel tankers. We strongly believe that this project is important for Oman and Orpic”. The new company, in which CLH and ORPIC will hold a 40% and 60% stake, respectively, will be called Orpic Logistics Company (OLC) and it will be responsible for the construction and management of a storage plant in the vicinity of Muscat, the capital of Oman, and a multi-product pipeline network that will connect the new storage plant to the two refineries existing in the country and with Muscat International Airport. The new pipeline network will have a total length of 290 kilometres and will make it possible for more than 5.4 million cubic metres to be transported. It will also be reversible, meaning that a highly flexible logistics system will be provided. The development and start-up of the infrastructures will be gradual. The first section of this pipeline network will consist of building the connection between the refinery in Muscat and the international airport, and is expected to become operational during the first half of 2016. On the other hand, the new storage plant will have an operating capacity of more than 170,000 cubic metres and will be fitted with 18 loading racks for expediting supply to the various distribution companies operating in Oman, and is expected to become operational in the first half of 2017, as is the pipeline for connection with the Sohar refinery. The building of these new infrastructures, in which CLH's broad experience in managing these types of logistics systems will be applied, will bring significant benefits to Oman, as it will permit increased security of oil product supplies and will reduce the use of tank trucks for transporting fuels by road. Besides this, it will mean that the costs of oil product transportation and distribution in the country can be optimised. For CLH, the development of this project represents an important first step in the internationalization process forecast in the Strategic Plan 2012-2016, the aim being to achieve greater diversification of its activities and to develop new business opportunities. CLH AND ORPIC Compañía Logística de Hidrocarburos CLH is the leading company in the Spanish market for the transportation and storage of oil products, with a pipeline network more than 4,000 kilometres long, and 39 storage facilities, with a total capacity of 7.9 million cubic metres, in addition to 28 airport facilities. ORPIC (Oman Oil Refineries and Petroleum Industries Company) is one of the leading companies in Oman and has two refineries in that country, in Sohar and Muscat. ORPIC is owned by the Government of the Sultanate of Oman and Oman Oil Company SAOC, the trading company created by the Government of the Sultanate of Oman for managing investments in the energy sector. This latter company has also been a CLH shareholder since 2003 and holds a 10% stake in the capital.
  • 5. Copyright © 2014 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 5 ChemaWEyaat and Indorama sign for Madeenat Aromatics project http://www.2b1stconsulting.com/chemaweyaat-and-indorama-sign-for-madeenat-aromatics-project/ The Thai chemical company Indorama Ventures (Indorama) and the local Abu Dhabi National Chemicals Corporation (ChemaWEyaat) signed an agreement to establish the joint venture Abu Dhabi Chemicals Integration Company (Tacaamol) to design and build the first phase of the Madeenat ChemaWEyaat Al Gharbia (MCAG) project in the Western Region of Abu Dhabi, along the boarder of Saudi Arabia. For some years, the Emirates of Abu Dhabi is working to balance its upstream activities with the added value generated by the downstream sector in expanding its petrochemicals capacities. In 2008, Abu Dhabi Emir established ChemaWEyaat as a joint venture between Abu Dhabi National Oil Company (ADNOC), the Abu Dhabi Investment Council and the International Petroleum Investment Company (IPIC) in order to channelize the best resources from the upstream side toward the petrochemical sector. At that time Abu Dhabi was targeting to invest up to $25 billion capital expenditure in the giant Madeenat ChemaWEyaat Al-Gharbia Master Planning project. As Tacaamol means integration, Abu Dhabi has conceived the Madeenat ChemaWEyaat Al-Gharbia Master Planning project as an integrated petrochemical complex similar to Sadara in Saudi Arabia. If integration favors the process optimization and related costs, it also adds complexity in the design and construction pushing forward the expected date of first production. So ADNOC and IPIC decided to split the Madeenat ChemaWEyaat Al-Gharbia Master Planning project in three phases. As a first phase, the Madeenat ChemaWEyaat Al-Gharbia (MCAG) project should require $10 billion capital expenditure. This first phase MCAG will itself be also phased up in a manageable way and in respect with the different partnerships required by ChemaWEyaat to licence the best processes with international chemical companies. In that respect the agreement signed between Indorama and ChemaWEyaat to create the joint venture Tacaamol is providing the first stone to the MCAG project.
  • 6. Copyright © 2014 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 6 Foster Wheeler won PMC for Tacaamol Aromatics http://www.2b1stconsulting.com/ In this Tacaamol joint venture, ChemaWEyaat and Indorama will share the working interests such as: - ChemaWEyaat 51% is the operator - Indorama 49% For this first phase of the MCAG project, ChemaWEyaat and Indorama intends to build through their Tacaamol joint venture an aromatics plant including: - 1.4 million tonnes per year (t/y of paraxylene (PX) - 500,000 t/y of benzene. - Petrochemicals tank farm - Export jetty In 2012, ChemaWEyaat had selected Foster Wheeler to provide the project management consultancy (PMC) services for the MCAG project. In September 2013, ChemaWEyaat had mandated CH2M Hill to carry out the front end engineering and design (FEED) work of the Madeenat ChemaWEyaat Al-Gharbia project. With Indorama joint venture, ChemaWEyaat is partnering with a polyester global leader producing PET and PTA all over the world. ChemaWEyaat and Indorama are planning to invest $1 billion capital expenditure in this Tacaamol Aromatics project as a first phase of the Madeenat ChemaWEyaat Al-Gharbia (MCAG) project to come on stream in 2020 .
  • 7. Copyright © 2014 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 7 Sarir oilfield attacked, power lines cut http://www.libyaherald.com/ By Jamal Adel. The Sarir oilfield was attacked by an armed group this evening and, during clashes with army units guarding the field, a main power line connecting the Sarir power station to a number of towns and cities was cut. Heavy weaponry was used in the attack and missiles were fired into the oilfield, Saleh Mohammed, commanding officer for the army’s 25th Brigade, which is responsible for guarding a number of facilities in the region, told the Libya Herald. He said that no oil tanks were hit in the clashes, during which army troops were able to repel the attackers, but that a main power line was cut. This line, he said, carried power into the national grid, connecting the Sarir power plant with Benghazi and a number of towns including Kufra and Jalo. The attack is thought to have been part of ongoing clashes in the region between the Zwai and Tebu tribes. These have been destabilising the area and led, on Monday, to workers evacuating the Sarir power plant, leading to its temporary closure. Earlier today, Fraj Bu-Jufool, the head of the self-named ‘Operation Room for the Liberation of the South’ – an armed group from the local Zawi tribe – announced that he, along with another group called 427 Brigade, had liberated the Sarir and Messla oilfields. This was denied by spokespersons for the army units at the two oilfields. It now appears that when Bu-Jufool made the announcement, his forces were actually preparing for this evening’s attack. It is believed that the attackers were from the same armed group which attacked Sarir farm – an agricultural project north of Kufra – on 21 December.
  • 8. Copyright © 2014 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 8 Kuwait's refineries still not at full production http://www.tradearabia.com/news/OGN_250529.html The largest of Kuwait's three oil refineries was fully operational on Friday after a power cut shut all of them in the week, but the other two are still not at full production, a spokesman said. The 460,000-barrels-per-day (bpd) Mina Ahmadi refinery was working at 100 per cent early on Friday, a spokesman for the Kuwait National Petroleum Company (KNPC) said. The 270,000-bpd Mina Abdullah and 200,000-bpd Shuaiba refineries were working at around 60 per cent and are expected to be fully operational by Saturday, the spokesman added. The three refineries, built next to each other on the Gulf coast south of the capital, were shut down by a power outage on Wednesday and have been slowly restarted by KNPC. OPEC member Kuwait has been using its reserves to prevent a disruption to exports. Power cuts often occur in Kuwait because of its outdated and unstable electricity supply system. Kuwait's Mina Al Ahmadi refinery
  • 9. Copyright © 2014 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 9 UK Offshore oil and gas licensing round begins by PERRY GOURLEY , http://www.scotsman.com/business/energy/ THE UK government has launched the latest licensing round for drilling for offshore oil and gas amid what it described as “high interest” from companies in exploring. Ministers said around 20 billion barrels of oil could still be buried in the seabed and that applications by explorers under the round will help unlock its economic potential.
  • 10. Copyright © 2014 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 10 A record number of licences were awarded in the previous round, including 21 new entrants, taking the total number of companies working in the North Sea to 50. Energy minister Michael Fallon said: “This new round of drilling for offshore oil and gas will help boost growth, energy security and jobs in the UK. The licensing of new areas forms an essential part of our long term economic plan by enabling the exploration necessary to ensure we fully realise our remaining reserves.” Last year, 36 offshore projects were approved under the previous round. Applications for the 28th licensing round have to be submitted by 25 April. The government said after reviewing the conclusions of an environmental report, a number of blocks in the deepest waters off the south-west of England are currently not being offered as part of the round because of lack of data over the marine environment there . A number of blocks excluded from earlier licensing rounds, including ones in the Moray Firth, have again been omitted for environmental reasons. UK oil and gas output has been in steady decline since production peaked around the turn of the century and the government is speeding up its planning regime to help oil and gas companies extract resources left below the seabed. Announcing the licensing round, the government highlighted the contribution of oil and gas industry to the economy. The offshore projects approved last year generated around £6.5 billion in tax revenue and another £5bn through taxes on the wider supply chain, the government said. The sector also employs roughly 350,000 people, of which 45 per cent are in Scotland. Current forecasts for the next five years show a need for an additional 15,000 employees. But WWF Scotland director Lang Banks said: “Given all the tax breaks provided for decommissioning old rigs and encouraging exploration in once-unviable areas, it’s hardly surprising that there’s so much interest by companies in even more oil and gas drilling in the North Sea. “However, given the urgent need to reduce our climate emissions, we urgently need to see ministers set out a clear plan to move us away from fossil fuels.” The government is also counting on vast onshore shale gas resources to help stem the UK’s growing dependence on energy imports and boost government coffers. The UK’s next onshore licensing round, which includes shale gas, is expected to be launched in early summer.
  • 11. Copyright © 2014 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 11 World buyers line up to buy U.S. natural gasREUTERS :- BY OLEG VUKMANOVIC AND EDWARD MCALLISTER Countries across the world have been quietly signing deals in recent months to import natural gas from the United States, revealing a growing appetite for the fuel overseas as domestic output soars. Up to a dozen long-term deals, each worth billions of dollars, have been penned behind closed doors with companies in China, Japan, Taiwan, Spain, France and Chile as global demand spikes, according to company, industry and trade sources. Through the agreements, China in particular has emerged as one of the biggest beneficiaries of cheap American natural gas that in the coming years will be piped to Gulf Coast plants and liquefied for shipment abroad in tankers. The unannounced deals, which amount to about 2 percent of daily U.S. supply, are not the first of their kind, and they depend on U.S. government approval to construct two new liquefied natural gas (LNG) plants. But the number of new buyers, and their global scope, show how the United States is taking steps to becoming a major export hub by stealing ahead of rivals in Australia and East Africa, successfully wooing needy Asian buyers even before projects begin construction. Global competition may squeeze profit margins on some exports of U.S. gas. Companies like Britain's BP (BP.L) and France's GDF Suez (GSZ.PA), already committed to taking LNG from the United States, are now finding multiple buyers willing to take tranches of supply. "As we see more contracts getting signed, it's an indication that the U.S. has really cheap natural gas that will help supply the global market," said Jason Bordoff, Director at the Center on Global Energy Policy at Columbia University. The United States is producing record amounts of natural gas thanks to a drilling boom, and more than a dozen export projects have been proposed. But large domestic users of natural gas such as the petrochemical industry are worried that unfettered exports could push prices higher at home. The Obama administration has been approving exports on a case-by-case basis. So far, only four projects are allowed to export across the globe and only one is under construction.
  • 12. Copyright © 2014 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 12 Cheniere Energy's (LNG.A) Sabine Pass project in Louisiana, expected to begin shipments late in 2015, has sealed deals with importers in Europe and Asia over the past two years. This latest batch of gas sales will be exported from Sempra Energy's (SRE.N) Cameron LNG plant in Louisiana and the Freeport LNG plant in Texas, sources said. Both plants are expected to begin operations by the end of the decade, pending approvals. Sempra is still waiting on permits to construct the Cameron plant, and to export the gas to countries with which the U.S. does not have a free trade agreement. Freeport has full export approval, but is yet to begin construction. THE DEALS Securing buyers early can make or break an LNG project. Without buyers, a project will not receive financial backing or be built. GDF Suez, which acquired export rights at Cameron last year, has agreed to sell all of its 4 million tonnes per year of capacity to buyers in Japan, Taiwan, China and Chile, according to a review of deals confirmed by industry sources. Japan's Mitsubishi (8058.T) and Mitsui (8031.T), also with export rights at Cameron, have separately targeted major buyers such as Spain's Repsol (REP.MC), France's Total (TOTF.PA) and Japanese utilities. Mitsubishi is to sell a significant chunk of LNG to its own trading arm in Singapore. Sources said Japanese buyers were reluctant to commit to large deals while the fate of its nuclear fleet remained uncertain after the 2011 Fukushima disaster. Mitsubishi is also in talks with Indian Oil Corp. (IOC.NS) to sell 1 mtpa of LNG for its planned terminal at Ennore in southern India, a company executive said. Exact volumes may be adjusted. Sempra hopes to make a final investment decision to build the Cameron plant later this year. Once that decision is made, the deals agreed by GDF Suez, Mitsui and Mitsubishi automatically become formal sales agreements, industry sources said. The San Diego-based company expects to win export approval from the U.S. Department of Energy before April. Meanwhile, BP is in talks to export LNG from the Freeport plant to China National Offshore Oil Corporation (CNOOC), giving the British company a foothold in the world's largest energy consumer. This
  • 13. Copyright © 2014 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 13 and older deals with other exporters will soon make China one of the largest importers of U.S. gas. BP has a further deal to supply Japanese utility Tepco with 0.5 mtpa, sources said. BP declined to comment. Mitsui and its prospective Japanese utility customers Kansai Electric and Tohoku Electric also declined comment. More than 12 million tonnes per year (mtpa) of LNG would be exported from the United States under the deals, or around 1.5 billion cubic feet per day of gas, though some volumes may alter in final negotiations, sources said. U.S. daily production is about 70 billion cubic feet. "These deals will send a signal that there is still strong demand for U.S. LNG volumes," said Andres Rojas, analyst at Waterborne Energy in Houston. GDF was also in talks with Thailand's PTT but these were abandoned after a failure to agree terms last year, a senior PTT source said. Mitsui also broke off talks with South Korean importer GS Caltex, a source at the company said. HARD SELL Despite these recent deals, sellers have found it harder than expected to find new buyers, and have had to offer favorable terms when they do. A projected LNG supply spike between 2016-2020 from North America, Australia, east Africa, Russia and Asia has empowered buyers to push down the price of long-term deals being negotiated now. This is partly reflected in the low profit margins U.S. exporters stand to make from many of the recently concluded agreements. "The United States is not the only gas producer, so we are competing in a market
  • 14. Copyright © 2014 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 14 with countries like Qatar, Malaysia, Australia and potentially East Africa," Bordoff said. "There is not infinite demand. There is only so much supply that the global market can take." In its first long-term LNG deal into Asia, GDF Suez is selling 0.8 mtpa to Taiwan's CPC from 2018 at barely breakeven levels. According to the price formula reviewed by sources, CPC will pay around $12 per million British thermal units for the gas in the first year of the contract, a steep discount to the $16 its pays for LNG prices in Asia linked to oil. Moreover, America's edge over rivals could easily dim should domestic gas prices rise nearer to pre-shale boom levels and crude oil prices simultaneously drop to around $80 a barrel. At those levels, LNG deals linked to oil begin to look globally competitive, handicapping buyers of American gas. Bearing these risks in mind, buyers nevertheless want limited exposure to U.S. LNG primarily as a way of negotiating down prices in oil-indexed, long-term contracts with Qatar and Australia. Commenrtary – Expert , Sustained Growth in Liquefied Latural Gas Over the past two decades, liquefied natural gas (LNG) has emerged as an increasingly core feature of the global gas balance, with growth of about 7% per year since 2000. Its contribution to meeting demand for gas has risen steadily to reach nearly 10% of aggregate gas supply in 2012. This represents production of 240 million tonnes (Mt) (source: CERA). As the distances between major gas-producing and consuming regions increase, this boom is set to continue in a very significant manner. By 2020, output is forecast to reach 373 Mt, and LNG should account for 13% of global gas supply. In contrast, LNG played only a marginal role in the gas balance of the North American market in 2012. The import volume of 18.6 Mt of LNG accounted for less than 2% of the aggregate gas demand of this huge market (source: CEDIGAZ and GIIGNL). The recent advent of large-scale shale gas production has offset the sharp decline in conventional gas output, sharply curbing import requirements. This scenario is likely to remain unchanged ten years from now: LNG imports are estimated at a mere 5 Mt.
  • 15. Copyright © 2014 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 15 NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE Your partner in Energy Services Khaled Malallah Al Awadi, MSc. & BSc. Mechanical Engineering (HON), USA ASME member since 1995 Emarat member since 1990 Energy Services & Consultants Mobile : +97150-4822502 khalid_malallah@emarat.ae khdmohd@hotmail.com Khaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 years of experience in theof experience in theof experience in theof experience in the Oil & Gas sector. Currently working asOil & Gas sector. Currently working asOil & Gas sector. Currently working asOil & Gas sector. Currently working as Technical Affairs Specialist fTechnical Affairs Specialist fTechnical Affairs Specialist fTechnical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation foror Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation foror Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation foror 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 Operationsthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operationsthe GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operationsthe 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 forManager in Emarat , responsible forManager in Emarat , responsible forManager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developedEmarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developedEmarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developedEmarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developed great experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of supplyof gas pipelines, gas metering & regulating stations and in the engineering of supplyof gas pipelines, gas metering & regulating stations and in the engineering of supplyof gas pipelines, gas metering & regulating stations and in the engineering of supply routes. Many yearoutes. Many yearoutes. Many yearoutes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs forrs were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs forrs were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs forrs 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 andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcastedEnergy program broadcastedEnergy program broadcastedEnergy program broadcasted iiiinternationally , via GCC leading satellitenternationally , via GCC leading satellitenternationally , via GCC leading satellitenternationally , via GCC leading satellite ChannelsChannelsChannelsChannels .... NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE NewBase 26 January 2014 K. Al Awadi Camels pass Crain oil drill in India 2012