NewBase 03 August 2023 Energy News issue - 1644 by Khaled Al Awadi.pdf

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NewBase Energy News 03 July 2023 No. 1644 Senior Editor Eng. Khaed Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: Occidental and ADNOC to evaluate carbon management
projects in the U.S & UAE to accelerate net zero goals
Source: Occidental
Strategic collaboration to assess potential investment opportunities aimed at accelerating
development of direct air capture and sequestration hub projects
Occidental and ADNOC have announced that they will evaluate investment opportunities in Direct
Air Capture (DAC) facilities and carbon dioxide (CO2) sequestration hubs in the United States and
the United Arab Emirates (UAE) as a pathway toward the development of carbon management
platforms to accelerate the net-zero goals of both companies.
The strategic collaboration between global energy leaders Occidental and ADNOC demonstrates
how the companies can work together on the potential deployment of carbon capture, utilization and
sequestration technology at scale in the United States and the Middle East and to help hard-to-
ww.linkedin.com/in/khaled-al-awadi-80201019/

abate industries achieve their net-zero targets through the purchase of carbon dioxide removal
credits alongside emissions reduction programs.
Under the terms of the Memorandum of Understanding (MOU), ADNOC may evaluate participation
in DAC plants and CO2 sequestration hubs under development in the United States by Occidental
subsidiary, 1PointFive. Occidental and ADNOC and may also evaluate jointly developing one or
more UAE-located CO2 sequestration hubs and consider commencing feasibility and pre-front-end
engineering and design studies for a 1 million tonne-per-year DAC plant, which together would
provide emissions reduction solutions for carbon-intensive industrial emitters and other hard-to-
abate sectors within the UAE, including aviation and maritime operations.
Through the collaboration, the companies will also consider opportunities to incorporate innovative
CO2-based technologies into the UAE. This includes technologies in which Occidental has made
investments, such as emissions-free power and sustainable fuels.
'We look forward to building on our longstanding partnership with ADNOC as we advance our plans
to globally deploy DAC technology and engage partners who are committed to developing carbon
solutions at climate-relevant scale,' said Vicki Hollub, Occidental President and CEO.
'Partnerships like this one are essential to helping the world reach its climate goals and ensure it
has the resources it needs to thrive through the energy transition. We look forward to working with
ADNOC on our shared vision of establishing a global net-zero ecosystem.'
The agreement is enabled by the UAE-U.S. Partnership for Accelerating Clean Energy (PACE),
which was launched in November 2022 and is expected to mobilize $100 billion in clean energy and
carbon management projects, including CCS and DAC by 2035.
In January 2023, an expert body was formed to govern PACE, co-chaired by His Excellency Dr.
Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology and ADNOC Managing
Director and Group CEO, and Amos Hochstein, White House Senior Advisor to the President for
Energy and Investment.
Musabbeh Al Kaabi, Executive Director of Low Carbon Solutions and International Growth at
ADNOC said: 'This agreement highlights how the UAE-U.S. Partnership for Accelerating Clean
Energy is driving innovative climate technologies to decarbonize the energy sector. The need to
significantly reduce carbon emissions to address climate change is clear and urgent and carbon
capture is an important technology that can be scaled up to decarbonize across all industries.
'ADNOC’s is a pioneer in carbon management, exemplified by our industry leading low-carbon
intensity and our operation of Al Reyadah, the region’s first commercial scale carbon capture facility.
As ADNOC accelerates its net zero ambition to 2045 and decarbonizes our operations, partnerships
like this offer the potential to transform the systems that will be vital to provide the lower-carbon
energy the world needs for the energy transition.'
1PointFive is currently constructing what is expected to be the world’s largest DAC plant, named
STRATOS, in Texas. The facility, which will use technology provided by Canada-based Carbon
Engineering, is designed to capture up to 500,000 tonnes of CO2 from the atmosphere each
year when fully operational. The DAC plant being evaluated by the companies in the UAE, if built,
would use the same technology and could be the first megaton-scale facility of its kind outside of
the United States.

Qatar N.gas production and exports stable as country eyes expansion
source: U.S. Energy Information Administration, International Energy Statistics; International Gas Union, World LNG Report 2022
In 2021, Qatar was the world’s sixth-largest dry natural gas producer, the second-largest liquefied
natural gas (LNG) exporter, and the third-largest holder of natural gas reserves, according to the
data in our recently updated Country Analysis Brief: Qatar.
Qatar’s government plans to increase LNG export capacity and natural gas production through a
major expansion in the North Field that is expected to be completed by 2028. Expanded North Field
natural gas production is expected to offset declines from mature fields and will increase overall
natural gas output in Qatar.
State-owned Qatar Energy plans to gradually increase the country’s export capacity to 19.7 billion
cubic feet per day (Bcf/d) when the six new liquefaction trains linked to two new North Field LNG
export terminal projects enter commercial service. Between 2011 and 2021, natural gas export
capacity remained unchanged at 13.3 Bcf/d.
Qatar's total natural gas exports include its natural gas exports through the Dolphin Pipeline to the
United Arab Emirates and Oman. In 2021, Qatar shipped 2.04 Bcf/d via the Dolphin Pipeline.
Qatar’s natural gas production grew at a rate of 18% per year between 2003 and 2013, but growth
slowed to a rate of less than 1% per year between 2013 and 2021. Many producing natural gas
fields reached maturity during the latter period, and no new production came online, reducing
growth.

Qatar’s dry natural gas production averaged around 16 Bcf/d between 2016 and 2021. Qatar holds
11% of the world’s proved natural gas reserves and almost 30% of the Middle East’s reserves,
according to the Oil & Gas Journal. Qatar’s vast natural gas reserves are primarily in the giant
offshore North Gas Field, known as South Pars, which is located on Iran’s side of the Persian Gulf.
Qatar sent more than 70% of its LNG exports to Asia and 25% to Europe in 2022, according to Kpler
tanker tracking data. High electricity demand in Asia has resulted in high natural gas demand in
Asia.
Global natural gas supply uncertainty because of Russia’s full-scale invasion of Ukraine and
curtailed pipeline natural gas supply to Europe have increased Asian demand for LNG exports from
new projects since 2022, such as those in Qatar.
Qatar is planning to expand its presence in the global LNG market as it shifts its emphasis from oil
markets. Qatar, one of OPEC’s longest-standing members, left the organization in January 2019,
saying the country wanted to shift resources away from oil to natural gas, according to press reports.
Qatar’s crude oil production fell 18% between 2012 and 2017. Crude oil production in Qatar has
remained relatively flat since then, hovering around 600,000 barrels per day.

UK: North Sea licences and carbon capture projects boost
energy security and the drive to net zero .. Source: OEUK
Offshore Energies UK, the leading trade association for energy firms from oil and gas to carbon
capture, offshore wind and hydrogen, has greeted the government’s commitment to the 33rd
licencing round and its carbon capture announcements as important steps forward for long-term
energy security and jobs.
North Sea licences and carbon capture projects boost energy security and the drive to net zero
Today’s go-ahead for the ACORN and Viking carbon capture projects, respectively in
Aberdeenshire and Humberside, is welcome news for firms that need an attractive environment to
invest in energy production and to establish new technologies and jobs across the UK.
Unlocking private sector capital is the key to making the transition to a low carbon world, and
companies across the energy mix are keen to see long-term, stable energy policies that help them
build that future.
In addition, HM Treasury has announced a review of the oil and gas fiscal regime 'to ensure the
regime delivers predictability and certainty, supporting investment, jobs and the country’s energy
security.'

David Whitehouse, OEUK CEO comments:
'Domestic production is the best pathway to net zero and the UK Government’s commitment to
licences is a welcome boost for energy security and jobs.
'Oil and gas fields decline naturally over time. The UK needs the churn of new licences to manage
production decline in-line with the maturing basin. There are currently 283 active oil and gas fields
in the North Sea, by 2030 around 180 of those will have ceased production due to natural decline.
If we do not replace maturing oil and gas fields with new ones, the rate of production will decline
much faster than we can replace them with low carbon alternatives.
'OEUK members share the vision and ambition of all parties on delivering a home-grown energy
transition and net zero with potential to spend almost £200 billion over the decade. The majority of
this could be spent in offshore wind, carbon capture and storage and hydrogen in the right
investment environment. To deliver net zero, an unprecedented amount of private investment needs
to be unlocked.
The Viking CCS project, run by OEUK members Harbour Energy alongside partner bp, and The
Acorn Project, set up by Storegga, Shell UK, Harbour Energy and North Sea Midstream Partners,
were selected as the next projects to receive government support from the £20 billion CCS fund
announced in this year’s Spring Budget.
Combined, the projects could capture and store tonnes of carbon per year and generate up
to £100bn worth of work for UK manufacturing companies by 2050. Some of the clusters will also
supply hard-to-decarbonise sectors with hydrogen to power operations as a low-carbon alternative
to fossil fuels.
Commenting, OEUK sustainability and policy director Mike Tholen said:
'Carbon capture and storage will be a key tool in the global fight against climate change, and
developing this technology is now a matter of national interest to our economy and our
environment.
'We have the capabilities necessary to make this a success – large industrial clusters, millions of
tonnes worth of storage capacity, and thousands of skilled people from the offshore energy industry
with transferrable expertise.
'But to really kickstart the UK’s CCUS economy, we need to maintain momentum. That means
continued, targeted and urgent progress from government and industry alike.'
Fast facts:
 UK targets to store 20-30 million tonnes pa of CO2 by 2030 – meeting this target needs four clusters
to be operational before 2030
 The Climate Change Committee estimate the UK will need up to 100 million tonnes of CO2 per annum
being captured and stored by the 2040s
 UK has 78 billion tonnes of CO2 geological storage capacity under the seas around the UK in depleted
oil and gas fields and saline aquifers
 The first Carbon Storage licence round was announced by the North Sea Transition Authority in Q3
2022, with results expected in Q4 2023, as many as 100 CO2 stores will be needed by 2050
 The UK has a target to generate 10 GW of low carbon hydrogen by 2030 which will require CCUS
clusters to be commissioned and in operations

First new U.S. nuclear reactor since 2016 is now in operation
source: U.S. Energy Information Administration, Preliminary Monthly Electric Generator Inventory,
A new reactor at Georgia’s Vogtle nuclear power plant is now in commercial operation, according
to an announcement from Georgia Power, one of the plant’s owners. It is the first new nuclear
reactor to start up in the United States since the Tennessee Valley Authority’s Watts Bar 2 was
commissioned in 2016.
The new 1,114 megawatt (MW) Unit 3 reactor joins two existing reactors at Plant Vogtle, which is
jointly owned by Georgia Power and three other electric utility companies. The plant’s first two
reactors, with a combined 2,430 MW of nameplate capacity, came online in the late 1980s.
Note: Data excludes capacity built and retired before 2002.
Georgia Power expects another similar-sized fourth reactor, Vogtle Unit 4, to begin
operation sometime between November 2023 and March 2024. The two new reactors will make
Plant Vogtle the largest nuclear power plant in the country, surpassing the 4,210 MW Palo Verde
plant in Arizona.
Construction at the two new reactor sites began in 2009. Originally expected to cost $14 billion and
begin commercial operation in 2016 (Vogtle 3) and 2017 (Vogtle 4), the project ran into significant
construction delays and cost overruns. The total cost of the project is now estimated at more than
$30 billion.
Both Vogtle Units 3 and 4 use a new reactor design, the Westinghouse AP1000. This next
generation advanced reactor has a smaller footprint and simpler design than previous generation
reactor technologies. It also features robust passive safety systems that can shut down the reactor
without any operator action or external power source.
Units 3 and 4 are the first U.S. deployment of the AP1000 Generation III+ reactor. Two other
Westinghouse AP1000 reactors were planned for a nuclear power plant in South Carolina,
but construction was halted in 2017.

The first commercial nuclear power reactor in the United States came online in December 1957 in
Shippingport, Pennsylvania. Most U.S. nuclear reactors were built in the 20-year period from 1970
to 1990. Prior to Vogtle Unit 3, the last nuclear reactor to start in the United States was Watts Bar
Unit 2 in Tennessee. Construction on Watts Bar 2 began in 1973 but was suspended in 1985. Work
resumed in 2007, and the reactor came online in 2016.
With 95,881 MW of nuclear power capacity at 93 operating commercial reactors, the United States
has more nuclear capacity than any other country. Nuclear power plants produce nearly 20% of the
country’s electricity.
Although a number of nuclear
reactors have retired in recent
years, there has
been interest in nuclear
power as an energy resource
to help reduce the carbon
footprint of the U.S. electric
power sector. Generation
from nuclear reactors doesn’t
produce CO2 emissions and
can provide essential
baseload power that would
otherwise largely come from
coal- and natural gas-fired
plants.
Recent legislation, such as the Bipartisan Infrastructure Law and the Inflation Reduction Act,
supports U.S. nuclear energy as part of a clean energy, zero-carbon generating portfolio.

NewBase August 03 -2023 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil steady after drop on U.S. downgrade as supply concerns support
Reuters + NewBase
Oil prices were little changed on Thursday after a two-day decline, including a sharp drop on
Wednesday, as the U.S. government's credit downgrade weighed on sentiment, though concerns
around supply tightness provided some support.
Ratings agency Fitch downgraded the long-term foreign currency ratings of the U.S., the world's
biggest oil consumer, reflecting expected fiscal deterioration, political polarisation and the
international status of the U.S. dollar.
Despite the broader bearish sentiment, prices are being supported by concerns of tightening supply
because of output cuts by major producers that are expected to be kept in place in a meeting on
Friday.
Brent crude futures were at $83.24 a barrel, up 4 cents or 0.1%, at 0422 GMT, while U.S. West
Texas Intermediate crude was at $79.53 a barrel, up 0.1%.
Oil price special
coverage

Both benchmarks were trading near their highest since April on Wednesday, but closed down 2%
after the ratings downgrade. WTI prices rose nearly 16% in July while Brent gained more than 14%.
"Since oil had a steady rise over the past month, it was ripe for a pullback. The oil market will remain
tight over the short-term, but prices could be still vulnerable for a deeper drop," said Edward Moya,
an analyst at OANDA.
The supply situation was highlight by a record 17 million barrel drop in U.S. crude stockpiles last
week as refiners stepped up runs and exports topped 5 million barrels per day (bpd), according to
data from the Energy Information Administration on Wednesday.
The inventory drawdown, which dramatically exceeded analysts' expectations in a Reuters poll of
1.4 million barrels, pointed to global demand outpacing supply as deep cuts from major producers
continue.
The next market monitoring committee meeting of the Organization of the Petroleum Exporting
Countries and allies, together called OPEC+, is to be held on Aug. 4.
Reuters reporting suggests that OPEC+ is unlikely to tweak its current oil output policy, with Saudi
Arabia expected to extend their voluntary 1 million bpd cut for another month to include September.
Government policies to boost the economy of China, the world's second-biggest oil consumer, are
also giving some support for prices and fuel demand. The world's second-largest economy also
reported on Thursday its services sector expanded at a quicker pace in June, offsetting
disappointing manufacturing data earlier this week.
"China's further stimulus policy and a sharp draw in the U.S. inventory data may still be the strong
fundamental reasons for a rebounding crude market," said Tina Teng, an analyst at CMC Markets
Oil majors still profitabe even if super-profits gone
Staff Writer, Agence France-Presse (AFP)
From BP to ExxonMobil to TotalEnergies, none of the oil and gas majors have repeated the
exceptional profits posted in 2022 when prices surged in the wake of Russia's invasion of Ukraine,
but they nevertheless remain comfortably profitable this year.
BP was the last to report earnings, reporting Tuesday a second-quarter net profit of $1.8 billion,
which was just a fifth of what it earned in the same period last year. Before it, the US giant
ExxonMobil saw its second-quarter profits tumble 56 percent to $7.9 billion, while rival Chevron saw
a similar fall to $6 billion.
Shell saw a 64 percent drop in net earnings to $3.1 billion, while TotalEnergies fared better with just
a 28 percent slide to $4.1 billion. All of them saw their financial performance "impacted by fluctuating
prices of oil, gas and refined products," as BP described it on Tuesday.
In 2022, the five oil majors earned a combined total of $151 billion in net profits thanks to the double-
whammy of the Russian invasion of Ukraine causing supply concerns, with Moscow cutting gas
supplies to most of Europe, just as the emergence of the global economy from pandemic lockdowns
boosted demand.
- 'Exceptional year' -
"2022 was clearly an exceptional year and not the norm," said Moez Ajmi, an energy analyst at the
consulting firm EY.

Oil and gas prices are now much lower.
The Dutch TTF gas contract, the reference for western Europe, fluctuated between 25 and 55 euros
per megawatt hour in the past three months, after hitting nearly 350 euros in March 2022 in the
wake of the Russian invasion.
Meanwhile, Brent crude traded at an average of $78.10 per barrel in the second quarter, far from
the $114 during the same period last year.
While their earnings were considerably lower, the energy majors "remain very profitable", Ajmi said.
"The proof: their policy to always reward shareholders and boost dividends, the increase in
investments compared with last year, and the better debt ratios," he added.
Shell announced a 24 percent increase in interim dividends, and the share buyback programmes in
place at the majors are also considerable, according to Ajmi's calculations.
- 'Elevated' prices -
Everything points to an "excellent 2023" for the energy majors, Ajmi said, even if the current pricing
levels mean they won't be anything like those of last year.
"Oil prices will be elevated, well over $80, as the economic prospects look better and soft landing is
more likely," said Adi Imsirovic, an oil sector expert at Surrey Clean Energy.
Support for oil prices has also come from decisions by Russia and Saudi Arabia to put less oil on
international markets.
Meanwhile, the gas market has stabilised.
"European gas storage is pretty full and in the absence of an exceptionally harsh winter, prices
should stay moderate," Imsirovic said.
But a cold winter in the northern hemisphere and an increase in demand from China would "quickly
ramp up gas prices", he said.

NewBase Specual Coverage
The Energy world –August-03 -2023
CLEAN ENERGY
Global coal consumption hit all-time high in 2022, IEA says
IEA
Global coal consumption hit a new record high in 2022 and will stay near that level this year as
strong growth in Asia outpaces declines in the United States and Europe, the International Energy
Agency (IEA) said on Thursday.
Coal consumption last year rose by 3.3% to 8.3 billion
tonnes, according to the IEA’s mid-year Coal Market
Update,
This year and next year, small declines in coal-fired
power generation are likely to be offset by rises in
industrial use of coal, the report added.
In the first half of this year coal demand fell faster than
expected in the United States and the European Union
– by 24% and 16%, respectively.
However, demand from the two largest users, China
and India, grew by more 5%, more than offsetting
declines elsewhere. Global coal demand reached a new
all-time high in 2022
Global coal demand is set to remain at all-time highs in 2023
We expect coal demand grew by about 1.5% in the first half of 2023 to a total of about 4 665 Mt,
backed by both an increase of 1% in power generation and 2% in non-power. We observed
continued increases in China, India and Indonesia, which more than offset declines in the United
States, the European Union and Japan.
In the second half of 2023, we expect a decrease in global coal-fired power generation to more than
reverse the first-half gains. For the whole year, we expect demand from the power sector to be 0.4%
lower at about 5 597 Mt. In the non-power sector, we expect growth to continue, reaching 2 791 Mt
for the full year 2023. As a result, overall global coal demand is expected to remain flat at around 8
388 Mt (+0.4%) in 2023. Whether coal demand in 2023 grows or declines, will depend on weather
conditions and on the economies of large coal consuming nations.
After three very particular years, with the Covid-19-induced shock in 2020, the strong post-pandemic
recovery in 2021, and the first truly global energy crisis after Russia’s invasion of Ukraine in 2022,
markets returned to more recognisable patterns in 2023: Declines in the United States and the
European Union, and continued growth in Asia.
The US and EU declines are driven by the power sector, with a combination of weak electricity
demand and renewable energy expansion. In the case of the United States, cheap gas is also
weighing on coal demand.

We estimate that China’s coal demand increased by about 5.5% in the first half of 2023, driven by
a comparison effect with H1 2022 when Covid-related lockdowns weighed on the economy, and
very low hydro output in H1 2023 which pushed up reliance on coal-fired power generation.
In the second half, growth is expected to slow slightly, mainly due to recovering hydropower
availability after last year’s drought. In total, we expect China’s coal demand in 2023 to grow by
about 3.5% to 4 679 Mt, with demand from the power sector up 4.5% and demand from non-power
uses growing by 2%.
Due to strong economic growth and coal reliance, India’s coal demand grew by about 5.5% in the
first half of 2023. With growth in the power sector slowing down a bit in the second half, we expect
a total increase of 5% for the year, totalling 1 212 Mt.
Indonesia is set to remain the fifth largest coal consumer in 2023, as economic perspectives are
positive, and the power sector, the smelting sector and other industries are all expected to demand
more coal.
In the United States, coal demand is continuing to decline, driven by the power sector. After
contracting by about 24% in the first half, a slower decrease in coal demand is expected in the
second half. Total coal demand in 2023 is expected to drop to 357 Mt.
Coal demand is also again on a downward trajectory in the European Union and Japan, as well as
Korea. In the first half of 2023, coal demand dropped by about 16% in the European Union and for
the full year it is expected to decline by about 17% to about 372 Mt.
he decrease is driven by weaker economic prospects, lower gas prices, nuclear recovery and ample
power production by renewable resources. In Japan and Korea, these effects are limited, resulting
in an expected demand of 179 Mt (-1.9%) in Japan and 117 Mt (-2.8%) in Korea.
Global coal demand is forecast to remain flat in 2024
In 2024, we expect global coal demand to remain stable (-0.1%) at about 8.38 bt, which remains a
level never reached before 2022. In the electricity sector, we expect a decline of about 1%, due to
the continued strong expansion of renewable power generation amid moderate electricity demand

growth. However, we expect a small increase of around 1.5% in the industrial sector, as economic
conditions improve.
Those trends are very much in line with the Coal 2022 report expectations, although at a higher
level given the already mentioned upward revisions for 2021. By region, Asia will grow, in particular
India and Southeast Asia, offset by declines in the United States and the European Union. Demand
is also declining in other mature economies such as Japan, Korea, Australia, and Canada, where
coal demand peaked some years ago.
China will continue to account for more than half of the world’s coal use, with the power sector alone
consuming one-third. If we add India, the global share rises to about 70%, meaning that China and
India together consume double the amount of coal as the rest of the world combined. Along with
recent growth in Southeast Asia, the dominance of the Asia continent is further increasing. In 2024,
the share of China, India and the ASEAN region is expected to reach 76%. At the same time, the
United States’ and the European Union’s share of coal consumption, which amounted to 40% three
decades ago, will fall to 8% by 2024.
Global coal production reached a new all-time high in2022
Despite lukewarm economic prospects, global supplies grew by 8% in 2022 to a record 8 634 Mt.
The three largest producers – China, India and Indonesia – each reached all-time highs in 2022.
Coal production was mainly boosted by China and India, which rapidly increased domestic
production to mitigate exposure to high market prices after a first price spike in October 2021.
Global coal production is expected to grow further in 2023, driven by an expected strong ramp-up
of production in China, India, and Indonesia in the first six months, offsetting declines in the United
States and the European Union. Russian coal production is estimated to have recovered somewhat
in the first half of 2023.

In March 2023, China reached another monthly record of 417 Mt2, surpassing the previous record
set in December 2022. In total, we expect China’s production to increase by 3.3% to 4 631 Mt for
the full year 2023.
In the first half, India’s supply rose by about 10%, reaching a new single-month production record
of 107 Mt in March, according to the Coal Ministry, surpassing 100 Mt in a single month for the first
time. For the entire year, we expect an increase in coal production to about 989 Mt (+7%), close to
the government's 1 bt target.
Indonesia’s coal production grew by an estimated 16% to 353 Mt in the first six months of 2023.
Growth is expected to slow down in the second half and we expect an increase of about 8% to about
695 Mt for the full year.
Due to ongoing demand destruction owing to wide unavailability of coal power plants after years of
poor maintenance and severe infrastructure issues, South Africa’s coal production is expected to
decline by about 4.2% to 220 Mt in 2023. In the first half, production is estimated to have decreased
by an even faster 10%.
In the US, coal production turns downward again. Although production is expected to have
increased by about 0.8% in the first half of the year, for the full year we forecast a 4.2% drop to 519
Mt, compared to a 22% decline in demand. Higher exports and stock building at power plants explain
the gap.
In the first six months, coal production in the European Union plummeted by an estimated 17%,
driven by falling demand from the power sector. In total, we forecast EU production to fall by about
8% to 321 Mt.

Russia’s coal production is expected to slightly decrease by 2.9% to 429 Mt in 2023, after an
estimated 1.4% increase in the first six months. But any forecasts for Russia are difficult under the
current wartime circumstances.
Australia’s coal production is set to increase by 2%, as weather conditions enable producers to
significantly expand production, after they had been severely hit by La Niña last year. Coal
production is anticipated to rise to 460 Mt.
Prices , After 18 months of high prices and volatility
In 2022, a convergence of soaring global coal demand and supply shortages led to exceptionally
tight coal markets and unprecedented price levels. There was an overall rise in energy prices after
Russia’s invasion of Ukraine, while high gas prices in particular drove many countries to switch to
coal-fired generation.
Supply- side factors included adverse weather conditions associated with La Niña, triggering heavy
rainfalls and flooding, severely impacting coal production mostly in Australia. Additionally, a
temporary export ban imposed by the Indonesian government in January 2022 to address domestic
shortages lowered the availability of thermal coal in the market.
Furthermore, the European Union banned Russian coal and a portion of these supplies could not
be diverted to other markets due to eastbound rail bottlenecks. As a result of all these factors, high-
CV Newcastle free on board (FOB)3 and ARA (Amsterdam Rotterdam Antwerp)4 thermal coal
prices surpassed USD 400/t several times in 2022.
Newcastle and ARA prices first peaked just below USD 400/t at the beginning of March 2022, when
Russia’s invasion of Ukraine unsettled the markets. Following a brief decline below USD 300/t in
April, prices ramped up ahead of announced western sanctions.

Newcastle prices, also boosted by supply shortages, first surpassed USD 400/t in May and
maintained these levels until declining steeply at the beginning of 2023. Prices reached an all-time
high of USD 443/t in September 2023. ARA prices peaked three times above USD 400/t between
the end of June and the end of July, before embarking on a downward trajectory after reaching the
all-time high of USD 408/t.
In the last quarter of 2022, ARA prices began to decline due to mild weather conditions and ample
stockpiles at European coal-fired power plants. ARA prices converged with prices in South China
at around USD 146/t at the beginning of 2023. Throughout 2022, prices for high-CV coal in South
China deviated substantially from the trends for Newcastle and ARA, and remained comparably
stable at an average price of about USD 169/t. Abundant domestic supply limited the exposure to
high import prices.
Whilst ARA prices plunged towards the end of 2022, coal prices in Newcastle commanded a
premium of up to USD 225/t over ARA in January 2023. The price disparity arose from robust
demand for Australian coal coupled with persistent supply shortages due to La Niña. Towards the
end of the second half of 2023, prices gradually converged.
Newcastle and ARA prices for high-CV thermal coal reached levels around USD 119/t, last seen at
the beginning of 2022. Prices in South China ranged just below USD 100/t, last observed in mid-
2021.

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About: Khaled Malallah Al Awadi,
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MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b

Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 years of experience in the Oil & Gas
sector. Has Mechanical Engineering BSc. & MSc. Degrees from leading U.S.
Universities. Currently working as self leading external Energy consultant for the
GCC area via many leading Energy Services companies. Khaled is the Founder of
the NewBase Energy news articles issues, Khaled is an international consultant,
advisor, ecopreneur and journalist with expertise in Gas & Oil pipeline Networks,
waste management, waste-to-energy, renewable energy, environment protection
and sustainable development. His geographical areas of focus include Middle East,
Africa and Asia. Khaled has successfully accomplished a wide range of projects in
the areas of Gas & Oil with extensive works on Gas Pipeline Network Facilities & gas
compressor stations. Executed projects in the designing & constructing of gas pipelines, gas metering &
regulating stations and in the engineering of gas/oil supply routes.
Has drafted & finalized many contracts/agreements in products sale, transportation, operation &
maintenance agreements. Along with many MOUs & JVs for organizations & governments authorities.
Currently dealing for biomass energy, biogas, waste-to-energy, recycling and waste management. He has
participated in numerous conferences and workshops as chairman, session chair, keynote speaker and
panelist.
Khaled is the Editor-in-Chief of NewBase Energy News and is a professional environmental writer with over
1400 popular articles to his credit. He is proactively engaged in creating mass awareness on renewable
energy, waste management, plant Automation IA and environmental sustainability in different parts of the
world. Khaled has become a reference for many of the Oil & Gas Conferences and for many Energy program
broadcasted internationally, via GCC leading satellite Channels. Khaled can be reached at any time, see
contact details above.

NewBase 03 August 2023 Energy News issue - 1644 by Khaled Al Awadi.pdf

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NewBase 03 August 2023 Energy News issue - 1644 by Khaled Al Awadi.pdf