new base energy news issue 905 dated 11 august 2016

Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,

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NewBase Energy News 11 August 2016 - Issue No. 905 Edited & Produced by: Khaled Al Awadi

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE

GCC waste management industry offers untapped opportunities: F&S study Saudi Gazette

Rise in waste, especially municipal waste, is likely to become a major reason for concern for the Gulf Cooperation Council (GCC), with the total waste generated to increase from 94 million MT in 2015 to as high as 120 million MT per annum by 2020, Frost & Sullivan report said.

Geographically, this will be spurred by the rapid increase in waste generation predominantly

in the Kingdom of Saudi Arabia (KSA) and the United Arab

emirates (UAE).

The rise is significant as

municipalities in the GCC are not equipped to handle this

level of waste generation through the existing landfilling

strategies. Adoption of alternate handling

mechanisms to deal with the

problem of increasing waste would be required, especially

when the block of countries is also striving to make amends

to the energy mix.

Abhay Bhargava, Associate Director & Regional Head –

Middle East – Energy & Environment Practice, Frost &

Sullivan, noted that “GCC will have to make a radical move

towards integrated waste management with emphasis

on “waste-to-value” methods such as recycling and waste-

to-energy coming into the picture. This can already be seen in the form of the recent tenders for waste

management in the GCC, as well as in the Middle East and North Africa (MENA).”

Based on recent studies that Frost & Sullivan has undertaken as part of a global waste management advisory practice, the market potential for waste can increase




anywhere by 1.5-2 times in the next five years. This will also disrupt the existing

waste management industry, which has so far primarily focused on the aspects of collection and transportation. Additionally, there is also a need for greater focus on

optimizing the segregation process, both at source and at material recovery facilities to minimize waste diversion to landfills.

Another disruption would be in waste composition itself. While waste in the GCC has

predominantly been construction and demolition and municipal, a rapid emergence of electrical and electronic waste, industrial hazardous, and bio-medical waste is also

being observed, which would require environmental-friendly treatment capacities in addition to what is already in place today.

Frost & Sullivan feels that this disruption will result in emergence of opportunities in

the sector for companies that can deliver solutions around segregation, recycling, sustainable treatment, and waste-to-energy across services, technologies, and

equipment.

The opportunities would not be limited to equipment specific to waste as energy

equipment and pollution control equipment manufacturers also stand to gain, with

increase in demand for boilers, incinerators, flue-gas treatment systems, geomembrane liners, recycling plant machinery, etc. coming in.

The need of the hour, considering the current scenario, would be to look at skills development, partnerships, and technology acquisition, all of which require a more

formalized approach to the business of waste. Frost & Sullivan also believes that

municipalities in the GCC can accelerate optimization through benchmarking and assessment of successful models in other regions, and implementation of these

learnings in the regional context.




Saudi-Iran Oil Rivalry Heats Up as OPEC Seeks Stable Prices Sam Wilkin

Saudi Arabia Reports Record Oil Output on Summer Demand

Saudi Arabia and Iran are giving no ground in their market share war, just days after OPEC announced an informal meeting to discuss ways to stabilize falling prices.

The Organization of Petroleum Exporting Countries announced on Monday it will hold informal talks on the sidelines of a conference in the Algerian capital next month. Saudi Arabia, the world’s largest crude exporter, told OPEC that it boosted oil output to a record 10.67 million barrels a day in July, two people with knowledge of the data said. Iran’s output is up to 3.85 million barrels a day, Fars news agency reported, citing Oil Minister Bijan Namdar Zanganeh. That’s the highest since 2008, data compiled by Bloomberg show.

“It only gives one signal to the markets that the Saudis are not here to scale back, especially in the face of Iranians bringing more oil to the market,” Abhishek Deshpande, an analyst at Natixis SA in London, said in a Bloomberg television interview. “I doubt there’s going to be any concrete agreement despite there being talks.”

Saudi Arabia typically pumps more oil in the summer to meet higher domestic energy demand from air conditioning. The kingdom is also engaged in a battle for market share with rival Iran and has cut prices to its customers in Asia, the biggest market for both exporters. Kuwait on Wednesday also cut its pricing to Asia, widening the discount to $2.65 a barrel for September from $1.70 a barrel in August.

OPEC’s smaller producers, which have driven calls to cap the group’s output, could only look on as prices tumbled more than 50 percent since mid 2014. The last effort to freeze output in April, which also included non-OPEC producer Russia, collapsed after Saudi Arabia demanded that Iran be part of the deal. Iran still opposes any limits on its production, with the country seeking to




reclaim its pre-sanctions share of OPEC’s total output before contributing to any production freeze, according to an OPEC delegate who asked not to be identified.

Weakness in global oil markets, which has dragged prices to a three-month low, may persist as demand slows seasonally and fuel inventories remain abundant, OPEC said in its monthly report Wednesday. Brent futures traded at $45.16 a barrel on the ICE Futures Europe exchange at 2:35 p.m. in London, having sunk to $41.51 on Aug. 2, the lowest intraday price since April 18.

OPEC nations aren’t pushing to revive the aborted April proposal, two delegates from the group said last week, and analysts don’t expect any deal to be reached.

“These planned OPEC discussions may be viewed by some as a cheap possibility to try and stabilize the market,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “It’s more likely to be a way of further destroying the market’s confidence in OPEC, as the organization cries wolf once again.”

Saudi Arabia Reports Record Oil Output on Summer Demand Wael Mahdi

Saudi Arabia told OPEC that it pumped a record 10.67 million barrels of oil a day in July to meet a summer surge in domestic demand, an increase that will do nothing to endear the group’s leading exporter to other members seeking output limits to shore up prices.

The figures were submitted to the Organization of Petroleum Exporting Countries, according to two people with knowledge of the data, who asked not to be identified because the information hadn’t yet been made public. The output beat the previous all-time production high of 10.56 million barrels a day in June 2015, according to OPEC submissions. The group confirmed the figure later Wednesday in its monthly report.




OPEC will hold informal talks at a conference in Algiers next month, as members constantly discuss ways to stabilize the market, Mohammed Al Sada, Qatar’s energy minister and holder of OPEC’s rotating presidency, said Aug. 8. Russia, Saudi Arabia and other major oil exporters met

in Doha in April in a bid to stabilize markets by putting caps on output. The effort collapsed after Saudi Arabia demanded that rival Iran be a part of the deal. At the time, Iran had ruled out any limits on its output as it ramped up after the lifting of international sanctions.

“It’s not surprising to see Saudi output at record,” said Anas al-Hajji, an independent analyst and former chief economist at NGP Energy Capital Management LLC in Houston. “The Saudis didn’t want to cut back on exports and

they needed to produce more to meet local summer demand. Also, the Saudis are processing more crude this year at refineries as they want to grow in the products market.”

Power Demand

Power demand in the Middle East peaks in the hottest months of July and August, when Saudis turn up their air-conditioners to cool homes and offices. Saudi Arabia was planning to boost crude production to 10.5 million barrels a day for the 2016 summer, a person with knowledge of Saudi output policy said in April.

Gasoline shipments from Saudi Arabia, the world’s biggest crude exporter, grew to 213,000 barrels a day on average between January and May, up by 76 percent from the same period a year ago, according to figures from Joint Organisations Data Initiative compiled by Bloomberg.

Increasing Competition

Saudi Arabia’s increased crude output comes as Russia and Iran are boosting shipments to the biggest markets such as India and China. Iran has boosted crude output to 3.85 million barrels a day and plans to keep raising production to 4.6 million barrels in five years, Fars news agency reported Wednesday, citing comments made by Oil Minister Bijan Namdar Zanganeh at parliament.

Any talk about a new oil-production freeze is premature and amounts to wishful talking up of the market as long as Russia, Saudi Arabia and Iran keep boosting output, said Mohamed Ramady, a London-based independent analyst and former professor of economics at the King Fahd University of Petroleum and Minerals.

After years of dominating crude sales to the Chinese market -- the world’s biggest -- Saudi Arabia is being challenged by Russia. The Asian country’s monthly imports from the Middle Eastern kingdom have been exceeded by purchases from Russia seven times since May 2015, customs data compiled by Bloomberg show.




Turkey: 48 govt ministers to speak at World Energy Congress Trade Arabia + Newbase

The range of players signed up from across the energy spectrum include international exhibitors such as Saudi Aramco, Sonatrach, ITER, Engie and Qatar Petroleum, while industry speakers include Rachel Kyte, from the global Sustainable Energy for All initiative, Bob Dudley, BP CEO, Alexey Miller, Gazprom chairman and Steve Bolze, GE senior vice president and CEO, Power and Water. EDF was confirmed last week as the latest silver sponsor of the event.

CNN is also confirmed as the event’s international broadcast partner, while Turkish official wire Anadolu Agency will be the global communication partner of this significant event. CNBC had already signed up as the international business media partner. The four-day programme will tackle the critical issues facing the energy industry under the theme “Embracing New Frontiers”. Hasan Murat Mercan, president of the Turkish Member Committee, World Energy Council commented: “The Congress is an excellent platform for all companies and organisations in the energy sector to come together, network, share ideas and collaborate on the future challenges and opportunities.” “Turkey is positioned at the crossroads of the most important energy markets at a time of profound global change, which makes it a good base for the event. Preparations for the Congress are progressing well and all necessary precautions are being taken to ensure that it runs smoothly and securely,” he added. –

October 9 to 13




Indonesia:Thailand's RATCH, Medco to Jointly Bid for Indonesian Gas Fired Power Plant .. Natural Gas Asia + NewBase

Thailand’s Ratchaburi Electricity Generating Holding (RATCH) has joined hands with Medco Energi Internasional to bid for a 250-MW natural gas-fired power plant in Riau, Indonesia.

The Thai firm will hold 49% stake in the joint venture while the Indonesia’s Medco Energi Internasional will own the remaining 51% stake.

Meanwhile, RATCH on Tuesday announced its redefined business plan. The company’s strategy for growth will shift its focus more on expansion into new business besides power and energy, and overseas investment. It targets to achieve the equivalent capacity goal of 10,000 MW by 2023, and 20-percent renewable energy capacity out of the target so as to serve the country's greenhouse gas reduction scheme.

For the first-half 2016 the company recorded the 2.360-billion-baht profit, up by 2.3% over the same period of last year. Additionally, in the first half of 2016, the company posted the 27.399-billion-baht revenue.




Nigeria: Shell Calls Force Majeure on Gas Supply After Leak Bloomberg - Paul Burkhardt

Royal Dutch Shell Plc said its local unit has declared force majeure on supplies to a liquefied natural gas plant in Nigeria because of a leak in a pipeline as the OPEC member suffers from militant attacks on energy infrastructure that are hurting exports.

“The pipeline has been shut down for a joint investigation visit into the cause of the leak and repairs,” Natasha Obank, a Shell spokeswoman, said in a statement. The leak occurred on the Eastern Gas Gathering System, or EGGS-1, pipeline which supplies the bulk of Shell’s gas to the Nigeria LNG plant on Bonny Island. Some supply continues through other pipelines, Shell said.

Nigeria’s government has resumed payments to former militants and is attempting to establish talks to end attacks on pipeline infrastructure in the oil-rich Niger Delta that have damped crude production to almost a 30-year low. Output has fallen to 1.4 million barrels a day, Minister of State for Petroleum Resources Emmanuel Kachikwu said earlier this month.

While Shell has declared force majeure on supplies, “alternative sources of gas supply have enabled Nigeria LNG to continue production and loading” at its plant on Bonny Island, Charles Okon, a spokesman, said Wednesday in an e-mailed response to questions.

Any reduction in LNG exports would be a blow to a country already suffering the economic effects of low oil prices and militant attacks. The NLNG project has a capacity to process 22 million metric tons a year of the liquefied fuel, or 7 percent of world supply, as well as 5 million tons of natural gas liquids, according to a Shell website. The Nigerian National Petroleum Corp. holds a 49 percent share and Shell has 25.6 percent. Total SA and Eni SpA hold 15 percent and 10.4 percent, respectively.




NewBase Energy News 11 August 2016 - Issue No. 905 Edited & Produced by: Khaled Al Awadi

NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE

Oil prices fall on US crude inventory build, record Saudi output Reuters + NewBase

Oil prices fell early on Thursday as a build in U.S. crude inventories and record Saudi Arabian production weighed on markets.

U.S. West Texas Intermediate (WTI) crude futures were trading at $41.34 per barrel at 0032 GMT, down 37 cents, or 0.9 percent, from their last settlement. International Brent crude futures were at $43.72 a barrel, down 33 cents, or 0.8 percent.

Oil fell sharply after data from the U.S. Energy Information Administration showed crude inventories rose 1.1 million barrels in the

week ended Aug. 5. Analysts polled by Reuters had expected a 1.0 million-barrel crude draw instead.

"Crude oil stocks rose 1.06 million barrels to 523.6 million barrels. The unexpected rise was driven by reduced operating rates at refineries, which fell 1.1 percent to 92.2 percent of capacity," ANZ bank said on Thursday.

"Bearish supply-side news also weighed on the market, with Saudi Arabia reporting a record 10.67 million barrels per day production in July," it added.

However, other analysts said that this was not necessarily a bearish market signal as Saudi's record output would be met by strong demand and supply disruptions elsewhere.

Oil price special

coverage




OPEC Says Weak Oil Demand Is Here to Stay Bloomberg News

Weakness in global oil markets, which has dragged prices to a three-month low, may persist as demand slows seasonally and fuel inventories remain abundant, OPEC predicted.

There are “lingering concerns” that U.S. and European refiners may reduce processing rates as profits fade amid a continuing “overhang” of crude and refined fuels, the Organization of Petroleum Exporting Countries said in its monthly report. Gasoline consumption will taper off in the U.S. with the end of the summer-vacation driving season, it said.

“With the end of the driving season in the third quarter, gasoline demand could see a seasonal downward correction,” the organization’s Vienna-based research department said. High inventories of heating oil and diesel fuel around the world mean “the supply side could also continue exerting pressure,” it said.

Oil’s recovery from the 12-year lows reached in January sputtered out in early June amid plentiful stockpiles, faltering demand growth and signs that U.S. explorers could resume drilling. OPEC, which is sticking with a strategy to maximize its market share and let prices sag, said Monday it will hold informal talks on the sidelines of a conference in Algiers next month.

Weaker Margins

Brent futures traded at $44.92 a barrel on the ICE Futures Europe exchange at 12:09 p.m. in London, having sunk to $41.51 on Aug. 2, the lowest intraday price since April 18.

“Refining margins have been weakening during the last month due to high product inventories, which were caused by the lower-than-expected increase in demand,” according to the report.

The re-balancing of world markets will resume towards the end of the year, according to OPEC. Consumption will pick up in the Northern Hemisphere as winter approaches, reversing some of the discount on oil prices for immediate delivery and whittling away the excess in inventories, OPEC forecast.

Production from OPEC’s members increased by 46,400 barrels a day to 33.106 million a day in July, according to external sources compiled by OPEC. That’s in line with the level the group expects will be needed in the third quarter. OPEC included Gabon, which became its 14th member on July 1, in both June and July production totals.

Production from Saudi Arabia, the group’s biggest member, was mostly stable at 10.477 million barrels a day in July, according to the external sources. The report also includes production data reported directly by member countries, which showed Saudi output rising by 123,000 barrels a day




to 10.673 million a day. Iraq’s direct submission showed its output rising by 57,000 barrels a day last month to 4.606 million a day.

OPEC kept estimates for global supply and demand this year and next mostly unchanged from last month’s report.

World oil demand projected to grow in 2017

In 2017, world oil demand is projected to grow by 1.15 million barrels per day from 2016 levels, and total oil consumption will a new record of 95.41 million barrels per day, according to the latest monthly report issued by Opec on Wednesday.

The report also said non-Opec supply in 2016 is expected to contract by 1.35 million barrels per day quarter on quarter mainly due to production shut-ins in Alberta, because of the wildfires in May, but output will again increase by 0.27 million barrels per day in third quarter of this year, partially due to the end of seasonal maintenance, the report said.

The output is expected to grow by 0.33 million barrels per day in the fourth quarter of this year, according to the report.

The report also talks about spending cuts on exploration and production due to the bearish oil price environment, impacting mostly non-Opec production performance. In 2015, the top ten major oil and gas companies, including two main service companies, cut spending by 15 per cent year-on-year compared to a decline of 6% in 2014 from a year ago.

For 2016, a further cut of 20%, with total spending of $135 billion, is anticipated, which is quite low compared to the $213 billion in 2013, the report said.




NewBase Special Coverage

News Agencies News Release 11 August 2016

DW: global FLNG capex to hit $41.6 billion

Despite challenging market conditions, global capital expenditure on FLNG facilities is forecast to total $41.6 billion over the 2016-2022 period, according to a report by Douglas-Westwood (DW).

The protracted oil price downturn has impacted the sanctioning of capital intensive liquefaction units over the last 24 months.

However, the need to move towards cleaner sources of energy and diversify gas supply has stimulated the floating regasification market – over 14 countries are expected to commission their first floating import unit over the forecast period, DW said in its World FLNG Market Forecast.

The FLNG capex of $41.6 billion represents an increase of 264% as compared with $11.4bn over the 2011-2015 period, DW said.




Liquefaction vessels will account for approximately 59% of forecast expenditure, with the remaining 41% allocated to import and regasification terminals. Near-term growth in expenditure will be predominantly driven by a number of flagship liquefaction projects sanctioned prior to the oil price downturn.

According to DW, global expenditure is expected to peak in 2017 as the first wave of sanctioned projects come onstream.

“Reduced project sanctioning will likely impact the market towards the end of the decade – with expenditure forecast to decline significantly in 2019 – before stagnating over the 2019-2021 period. Long term prospects are positive, a marginal uptick in spending is expected in 2022, driven by the sanctioning of a second wave of capital intensive liquefaction projects.”

Over the forecast period, Africa and Asia will be key areas for liquefaction and regasification units – with both regions accounting for 54% of total global expenditure. Spend in Australasia is set to decline post 2018 after the installation of Shell’s Prelude FLNG, DW noted in the report.

“Despite near-term concerns, the long term viability of FLNG technology is clear. In the decades ahead, natural gas will continue to play an increasingly important role in meeting global energy demand. Furthermore, the rising cost of onshore development terminals and the shorter lead times of floating units makes the technology a viable option in the current market environment.”

The History of FLN

It has been a long voyage for FLNG. Research began in the 1970s. The initial detailed designs were made in the early 1990s with associated efforts to start an FLNG project around the turn of the millennium, but the emergence of Qatar as a dominant exporter and falling costs for giant onshore liquefaction trains halted progress.




Today, growing demand, high prices, environmental and community challenges and steep costs for the infrastructure of land-based projects, have led several leading LNG players – including Woodside, Shell, Petronas, ExxonMobil and Inpex – to take another look.

FLNG promises to unlock smaller, remote or environmentally-sensitive fields. Numerous projects in Southeast Asia, Australasia, Africa, the Eastern Mediterranean and Latin America may benefit. It is not just an offshore solution; developers in Western Canada and Papua New Guinea are considering it for onshore fields.

Novel gas resources, such as Brazilian pre-salt associated gas and North American shale gas have opened up new possibilities to use floating systems for export. FLNG can save costs and time – if executed well. As experience is gained, future projects may achieve first gas production quicker and more cheaply.

The voyage to FLNG Firm Probable Possible Israel Canada USA Equatorial Guinea Colombia Mozambique Malaysia Indonesia Australia Papua New Guinea Trinidad China Ghana Timor Leste Nigeria Russia Mauritania Brazil Norway FLNG projects worldwide* *KPMG International Inc., 2014; D. K. Jordan, (27 May 2014), ‘Floating LNG’, Clarkson Research Services Ltd. As of September 2014; may be subject to change.




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Khaled Malallah Al Awadi, Energy Consultant MS & BS Mechanical Engineering (HON), USA Emarat member since 1990

ASME member since 1995 Hawk Energy member 2010

Mobile: +97150-4822502 [email protected] [email protected]

Khaled Al Awadi is a UAE National with a total of 26 years of experience in the Oil & Gas sector. Currently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years, he has developed great

experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas transportation, operation & maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcasted internationally, via GCC leading satellite Channels. NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE

NewBase 07 August 2016 K. Al Awadi

new base energy news issue 905 dated 11 august 2016

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