new base energy news issue 930 dated 22 september 2016

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NewBase Energy News 21 September 2016 - Issue No. 929 Edited & Produced by: Khaled Al Awadi

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UAE's first VLCC bunkering berth enhances country's position in global energy trade: Energy Minister

(WAM) -- The inauguration of the UAE's first berth for very large crude carriers (VLCC) in the Indian Ocean sea port of Fujairah will further establish the country as a key hub for global energy trade, Suhail bin Mohammed Faraj Faris Al Mazrouei, Minister of Energy, said on Wednesday.

"The strategic project highlights the UAE's position as a global energy hub as well as Fujairah's strategic location," Al Mazrouei said after H.H. Sheikh Hamad bin M ohammed Al Sharqi, Supreme Council Member and Ruler of Fujairah, inaugurated VLCC-1 at the bunkering facility.

The project reflects the vision of H.H. Sheikh Hamad bin Mohammad for th e future of the emirate, and is a milestone in the course of comprehensive development being carried out to implement the UAE Vision 2021 and the UAE National Agenda as it supports the state's long-term energy strategy and efforts to make the optimal benefit from the competitiveness of each emirate, he stated.

"Thanks to its leadership, the UAE will set an example for other states in the diversification of sources of income, integration between economic sectors and maximising capacity to boost economy and achieve sustainable development. This is especially so because such vital projects contribute towards development in this region and beyond," he said.

By opening of the largest VLCC facility in the Middle East, the UAE sets yet another record as the facility can receive oil tankers with a capacity of up to 260,000 tonnes (two million barrels) 24/7, the energy minister noted.




Algeria: New fields to boost Algerian gas output in 2017 Source: Reuters

Algeria is on track for more than 9 billion cubic meters a year additional gas output next year when three delayed projects in its south west come online, a source at state energy company Sonatrach said.

The third largest gas supplier to the Europe Union, Algeria has struggled in recent years to increase production of crude and natural gas because of low foreign investment to boost output at maturing fields and work new production.

For a year, European Union officials and energy firms have been pushing Algeria to adapt to more competitive markets, especially with the fall in crude prices, to attract the investment needed to pump more gas north again.

Among the projects are Touat Gas set for February 2017 with an estimated output of 12.8 million cubic metres per day, Timimoun in March 2017 with 4.6 million cubic metres per day, and Reggane will provide 8 million cubic metres per day in June.

'The three projects will come online on time, the outcome will reinforce our position as a reliable gas exporter to Europe. No delays, the projects will be delivered in 2017,' the Sonatrach source told Reuters.

'Further in the south, we have found a huge potential of gas around the fields ofAkabli and Tidikelt, in addition to Alrar's project in the east that will deliver gas and oil,' the source said.




A drop in European gas demand dented Algerian exports that were squeezed by slowing production at mature fields, low investment and a rapidly increasing domestic need for gas to generate power.

Still, Sonatrach has invested to stabilise and increase production at its large, mature fields and expects to bring five new gas fields online in the south of the country despite delays from state bureaucracy.

Gas output is expected to reach 141.3 bcm in 2017, 143.9 bcm in 2018, 150 bcm in 2019 and 165 bcm in 2020, according to a Sonatrach document.

In another advance, Algeria's Tiguentourine gas plant resumed full productionfor the first time since a militant attack in 2013, after its third train came back online. The plant, operated with BP and Statoil with a full capacity of 9 billion cubic metres a year.

At its huge, mature Hassi R'mel field, Sonatrach has engaged in boasting operations to help bolster production.

Sonatrach is also due to recuperate by the end of 2017 important volumes of gas that have been injected in the past decades in Hassi Messaoud and its region

Algeria is expected to export 50 billion cubic metres in 2016 to Europe, an increase of 15 percent in comparison with 2015, according to Sonatrach.

Algeria is seen as a natural partner for the European Union as it looks to diversify energy supplies after the Ukraine conflict exposed the risks of relying too much on the bloc's top gas supplier, Russia.




Libya Oil Port Ships First Cargo Since 2014 as Fighting Ebbs Bloomberg - Hatem Mohareb

A tanker sailed from Libya with a crude cargo bound for Italy after a halt in fighting between rival armed forces enabled the OPEC country to resume exports from its third-largest oil port for the first time since 2014.

The Seadelta left the port of Ras Lanuf overnight Tuesday with 781,000 barrels of crude, Nasser Delaab, petroleum operations inspector at Harouge Oil Operations, said by phone. The vessel earlier had to interrupt the loading and move offshore due to a clash over control of the terminal. A second tanker, the Syra, began taking on 600,000 barrels of crude at Ras Lanuf on Wednesday and was to set sail after a 10-hour loading, Delaab said.

The shipments are good news for Libya’s economy as rival administrations struggle to form a unified national government amid a five-year conflict over energy resources and political power. Libya is seeking to ramp up crude output and exports, which withered after the central government’s authority collapsed following the 2011 ouster of former dictator Moammar Al Qaddafi.

Largest Reserves

Earlier this month, state-run National Oil Corp. ended measures that had curbed exports from the nation’s main oil ports of Es Sider, Zueitina and Ras Lanuf. Only one of the country’s nine oil-export terminals -- Zawiya -- remains closed, due to the shutdown of a pipeline that supplies it, Ibrahim Al-Awami, head of the NOC’s oil measurement department, said by phone. Libya holds Africa’s largest oil reserves and pumped 1.6 million barrels of crude a day before Qaddafi’s ouster.

For more on Libya’s oil ports and terminals, click here




The company that loaded the Seadelta’s cargo is OMV AG, the Vienna-based oil business with refineries in central Europe and equity in Libyan fields, according to two people with knowledge of the shipment and who asked not to be identified because the information is private. An OMV spokesman, Robert Lechner, declined to comment. The Seadelta is expected to arrive in Trieste, Italy, on Sept. 24, according to ship-tracking data on Bloomberg.

Libya has boosted crude production by more than 70 percent since August as some oil fields resumed output and other ports also reopened for their first overseas loadings in more than two years. The nation’s crude output rose to 450,000 barrels a day, Ibrahim Al-Awami, NOC’s head of oil measurement department, said by phone on Tuesday. Production was 260,000 barrels a day last month, data compiled by Bloomberg show.

The Seadelta will be delivering its cargo into an oversupplied market in which crude is trading at about half its 2014 levels. Benchmark Brent crude was up 1.4 percent at $46.54 a barrel on Wednesday at 5:17 p.m. in Dubai.




India wants to add UAE, Saudi oil for strategic reserve Reuters

Dharmendra Pradhan told a news conference India is exploring two to three other models for sourcing oil to fill the remainder of the storage.

During Saudi Arabia Energy Minister Khalid A. Al Falih's visit to New Delhi in October, India plans to discuss the filling of the Mangalore strategic storage, and investments in refinery and petrochemical projects. Globally, most of the biggest crude oil consuming countries have a strategic storage capacity of at least 50 days, but India currently stands less than 10 days.

In 2005, the Oil Ministry had set up Indian Strategic Petroleum Reserves Ltd (ISPRL) to build strategic storages in India. Under phase I of development, the company has built a total of 5.33 mt of storage capacity in three locations - Vizag (1.33 mt), Mangalore (1.5 mt) and Padur (2.5 mt). Only Vizag is currently operational

India’s crude oil imports peaked in August as refineries stepped up purchases to meet record domestic fuel consumption.

Indian refiners imported 18.81 million metric tons (about 4.45 million barrels a day) of crude oil during the month, a 9.1 percent increase over last year, according to the oil ministry’s Petroleum Planning & Analysis Cell. That is the highest level in data on thePPAC’s website going back to April 2009.

The South Asian nation of 1.3 billion people, which meets over 80 percent of its crude oil requirements through imports, has emerged as a bright spot for global oil demand as the the fastest economic expansion among major economies spurs increased use of trucks, cars and motorbikes. The International Energy Agency expects India to be the fastest-growing crude consumer in the world through 2040.

“India’s domestic fuel demand has been rising at a scorching pace,” according to Tushar Tarun Bansal, director at Singapore-based Ivy Global Energy. “To meet this strong growth, India’s refinery runs have been on an uptrend, leading to higher imports.”

The nation’s gasoline consumption reached a record in August, surging 25 percent from a year earlier, while demand for diesel rose 13 percent, the fastest pace since March. Virendra Chauhan, an oil analyst at Singapore-based consulting firm Energy Aspects Ltd., expects India’s oil demand to grow by 0.4 million barrels a day this year and by 0.2-0.3 million barrels a day next year.

Indian refiners are racing to add capacity, spending billions of dollars amid rising fuel consumption. State-run Indian Oil Corp., the country’s biggest refiner, aims to increase its capacity by 30 percent, or about 2 million barrels per day, over the next six years by expanding its existing refineries across the country.

The country’s 23 refineries have a total capacity of 230 million tons a year, while total fuel demand was 183.5 million tons during the financial year that ended March 31, according to the oil ministry. “There has been strong demand -- gasoline growth is unprecedented and diesel growth will rise after monsoon,” Sanjiv Singh, director of refineries at Indian Oil, said.




Russia Is Pumping Oil at Its Fastest Pace Since the Soviet Era Bloomberg- Stephen Bierman

Sha re on T witter Russian oil output rose to a record ahead of talks on supply with Saudi Arabia and other members of the Organization of Petroleum Exporting Countries next week.

Output in September has been about 11.09 million barrels a day, the highest monthly average since the Soviet era, and reached about 11.18 million on Tuesday, Energy Ministry data show. Maintenance at Sakhalin Island in August capped output that month at just over 10.7 million barrels a day.

Russia will meet fellow oil producers in Algiers on Sept. 28 to discuss the market as the global crude surplus keeps prices below $50 a barrel. President Vladimir Putin said Sept. 1 he’s confident producers can overcome differences that derailed a proposal to freeze supply in April. Yet the start of new Russian fields shows the country is keen to squeeze as much revenue from its oil resources while it can.

“Russia keeps posting new record highs because neither Russia nor OPEC managed to agree upon freezing,” said Alexander Kornilov, an oil analyst at Aton LLC. “Production is profitable.”

Putin Stance

The April agreement collapsed when Saudi Arabia insisted on the participation of Iran, which refused to join as it ramped up output following the removal of international sanctions. Putin




has saidhe’d like Russia and OPEC to reach an accord on freezing supply while exempting Iran until it restores production to pre-sanctions levels.

Russia would be ready to cap output at the level of any month in the second half of this year, Energy Minister Alexander Novak said two weeks ago in China.

To read about possible outcomes from the Algiers meeting, click here.

Russian oil producers have been able to weather the commodities rout as a weaker ruble reduced costs and taxes eased with lower crude prices. That has helped support output at existing projects as new fields come on line.

Putin on Wednesday oversaw the start of Siberia’s East Messoyakha oil field, run by Rosneft PJSC and Gazprom Neft PJSC. The deposit is expected to produce 577,000 tons of oil this year and reach a peak of 5.6 million tons, or 112,000 barrels a day, at the end of the decade, according to the Kremlin.

Rosneft, Russia’s largest oil producer, also plans to start its Siberian Suzun field in a month’s time, Chief Executive Officer Igor Sechin said Wednesday. The company expects output from the deposit to peak at 4.5 million tons of oil, or 90,000 barrels a day, in 2017, according to a presentation last month.

Russia’s second-largest producer, Lukoil PJSC, started test production at the Caspian Sea’s Filanovsky field at the beginning of August, pumping 20,000 barrels a day, it said Aug. 30. The company’s press service didn’t immediately comment on Filanovsky’s current output when contacted on Wednesday.




U.S. crude inventories fall unexpectedly for third week: EIA Reuters

U.S. crude oil inventories fell sharply last week, the third consecutive week of unexpected declines, while gasoline stocks decreased nationwide but posted record builds on the Gulf Coast amid the shutdown of a key pipeline, data from the Energy Information Administration showed on Wednesday.

Crude inventories USOILC=ECI fell 6.2 million barrels in the week to Sept. 16, compared with expectations in a Reuters poll for an increase of 3.4 million barrels.

It marked the third straight week of draws, surprising traders who expected a rebound after a 14.5 million-barrel draw in the week to Sept. 2, the biggest weekly drawdown since 1999.

U.S. crude imports USOICI=ECI rose last week 77,000 barrels per day.

Imports to the U.S. Gulf, however, dropped sharply to 2.9 million bpd from 3.4 million bpd the previous week, close to record low rate of 2.5 million bpd hit in the week to Sept. 2 when a Tropical Storm Hermine disrupted supplies.

Gasoline stocks USOILG=ECI fell 3.2 million barrels nationwide, compared with analysts' expectations for a 567,000-barrel drop.

Gulf Coast gasoline inventories, however, rose 4.8 million barrels last week, a record weekly build, to the highest level ever for this time of year at 83.7 million barrels, the EIA said, amid the shutdown of the 1.3 million barrel per day Colonial pipeline that runs from the Gulf to the East Coast.

Crude oil storage tanks are seen from above at the Cushing oil

hub, in Cushing, Oklahoma,




Meanwhile, East Coast stocks posted their largest-ever weekly decline of 8.5 million barrels, slumping to the lowest level since December, 2014 at 55.5 million barrels.

"The Colonial pipeline mess is evident in the gasoline data, which showed supplies stranded in the Gulf and drawn down in the East. We will have to see if the trends normalize next week," said John Kilduff, partner at New York energy hedge fund Again Capital in New York.

Refinery crude runs USOICR=ECI fell 143,000 bpdas utilization rates USOIRU=ECI fell 0.9 percentage point to 92 percent of total capacity, EIA data showed.

Distillate stockpiles USOILD=ECI, which include diesel and heating oil, rose by 2.2 million barrels, versus expectations for a 250,000 barrels increase, the EIA data showed.

Crude stocks at the Cushing, Oklahoma, delivery hub USOICC=ECI rose by 526,000 barrels, EIA said.

U.S. West Texas Intermediate (WTI) crude futures CLc1 extended gains after the data. By 11:03 a.m. EDT (1503 GMT), WTI was up $1.05 cents, or 2.4 percent, at $45.10, versus a session peak of $45.49.




NewBase 22 September 2016 Khaled Al Awadi

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

Oil extends rise after surprise US crude stock draw Reuters + NewBase

Oil prices extended gains from the previous session in Asian trading on Thursday after a surprise third consecutive weekly U.S. crude inventory draw tightened the market.

U.S. West Texas Intermediate (WTI) crude oil futures were trading at $45.59 per barrel at 0045 GMT, up 25 cents from their previous close. The contract had already gained as much as 3 percent the day before.

Prices jumped after the U.S. Energy Information Administration (EIA) surprised the market with a 6.2 million barrel fall in crude oil inventories last week to 504.6

million barrels. Forecasters in a Reuters poll had expected a 3.4 million-barrel build. "Oil prices rose after EIA data showed U.S. crude inventories declined to the lowest level since February," ANZ bank said in a note on Thursday.

International benchmark Brent crude futures were also up, gaining 27 cents from their last close to $47.10 per barrel. Brent was lifted by an oil workers' strike in Norway, which threatened to cut North Sea crude output.

A weaker dollar after the Federal Reserve left U.S. interest rates unchanged also supported oil prices as it makes dollar-traded fuel imports cheaper for countries using other currencies. Despite recent gains, analysts said that oil prices would likely remain range-bound at relatively low levels, putting pressure on oil producers.

Oil price special

coverage




"In a world of continued (U.S.) shale productivity gains that cause other oil producing regions around the world to become highly focused on cost competitiveness, we believe investors and companies should prepare for an environment of rangebound oil prices," Goldman Sachs said in a note to investors published late on Wednesday.

In a clear illustration of the impact on the ground of the oil industry's cost cutting and reduced exploration activity, the waters around Singapore have become the dumping ground for hundreds of drilling and offshore oil support vessels that have become surplus to requirement in the current era of cheap oil.

UAE says Algiers oil talks aimed at consultation, not decision-making Reuters + Newbase

An oil meeting next week in Algiers due to be attended by OPEC countries is aimed at holding consultations rather than making decisions, the energy minister of the United Arab Emirates said on Wednesday.

"Wait until we meet next week," Suhail bin Mohammed al-Mazroui told reporters. "Wait for us to discuss first before we jump to any conclusion."

"We are not ... targeting a decision, we are meeting for consultations," he said, adding: "We at the

UAE are encouraged and we support the joint approach between Saudi Arabia and Russia."

Members of the Organization of the Petroleum Exporting Countries will meet on the sidelines of the International Energy Forum, which groups producers and consumers, from Sept. 26-28. Non-OPEC producer Russia is also attending the forum.

Saudi Arabia, the leading oil producer inside OPEC, and Russia, the biggest producer outside the group, agreed in early September to cooperate on global oil markets, saying they would not act immediately but could limit output in the future.

"We should not drive expectations in a certain direction prior to the meeting ... We need to be cautious not to do something that is a quick solution," Mazroui said.

Algerian Energy Minister Noureddine Bouterfa said on Tuesday that OPEC members could decide to hold an extraordinary meeting to discuss oil prices immediately after their gathering in Algiers.

OPEC and non-member producers including Russia are discussing a deal to stabilize the oil market by at least freezing output, although key details such as the timing and baseline for any deal have yet to emerge.

Several producers have called for an output freeze to rein in a supply glut that triggered a price collapse in the last two years, hitting their income. Previous talks on an output freeze collapsed in April.

Russian Energy Minister Alexander Novak said he hoped for a "constructive" dialogue inside OPEC at a meeting in Algeria where Russia will also be present, TASS reported on Wednesday.

"We want to underline once again that we are ready to discuss questions of coordination and cooperation on (global oil) markets," Novak was quoted by TASS.

A non-OPEC member Russia, as well as OPEC countries, including the biggest producer in the group Saudi Arabia, are set to meet next week to discuss the situation on the global oil markets and ways to stabilize it.




NewBase Special Coverage

News Agencies News Release 22 September 2016

ExxonMobil: Population, Economic Growth Driving Future Energy Demand by Valerie Jones

ExxonMobil's Rob Gardner says the world's energy demand will be driven primarily by population and economic growth. Overall energy demand is expected to rise 25 percent by 2040, driven by rising populations in China, India and key growth countries, Rob Gardner, manager, economics and energy division, corporate strategic planning department, for ExxonMobil Corp. said Tuesday at the 2016 Deloitte Oil & Gas Conference.

Gardner said it’s important to play close attention to the key growth countries (identified as Brazil, Mexico, South Africa, Nigeria, Egypt, Turkey, Saudi Arabia, Iran, Thailand and Indonesia), because they are believed to grow the most – both economically and in energy demand. Rob Gardner Rob Gardner, Manager of Economics and Energy Division & Corporate Strategic Planning Department, ExxonMobil Manager of Economics and Energy Division & Corporate Strategic Planning Department, ExxonMobil ”As we look to the future from 2014 to 2040, we see economic growth shifting to larger than 50 percent shares in the developing world,” said Gardner. “By 2040, roughly 50 percent of world energy demand will be consumed in 12 countries: China, India and the key growth countries.”




While the United States isn’t included in those figures, Gardner noted that the country’s population is expected to grow and the economic output is expected to rise more than 80 percent by 2040 with less energy.

“Our economy is not as energy-intense as it would have been before, but we’re also changing our energy mix – using more natural gas and renewables,” he said. “Oil is expected to stay about the same.” This energy mix transition will cause overall global emissions to peak and plateau while the OECD (which includes the United States) will trend down. Therefore, the United States’ carbon emissions will reduce over time. Gardner said the world’s oil supply will reach about 112 million barrels per day by 2040 – a 20 percent increase – and North America will play a significant role in that. “What we’ve seen over the last decade is a real transition away from what we would consider the conventional supply type,” he said. “Tight oil and deep water oil sands is where a lot of the energy supply is going to come from. The world is in a period of abundance, so there is a significant supply source.” From 2014 to 2040, Gardner said oil and gas will run between 55 and 60 percent share of the overall energy mix during this time period. Valerie is an experienced writer and editor dedicated to providing useful and relevant career news about the oil and gas industry. Email

Valerie at [email protected]




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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 22 September 2016 K. Al Awadi

new base energy news issue 930 dated 22 september 2016

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