New base 979 special 26 december 2016 energy news

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,

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 December 2016 - Issue No. 979 Senior Editor Eng. Khaled Al Awadi

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

UAE: Second phase of Dubai’s 200 MW solar park to power 30,000 homes starting April

The National - LeAnne Graves

About 30,000 homes in Dubai will be powered by the sun starting April as the second phase of the emirate’s major solar park is completed.

Eighty per cent of the construction has been finished at the 200 megawatts phase in the Mohammed bin Rashid Al Maktoum solar park, the developers, Saudi Arabia’s Acwa Power and partner TSK of Spain, said yesterday. The electricity generated from this phase will also be used to power the World Expo 2020.

The Dh50 billion solar park is planned to generate 5,000MW by 2030, or enough electricity for 750,000 homes. Once the second phase is complete, the park will generate 213MW of solar PV power.

Construction of the 800MW third phase will soon be underway. There will also be an upcoming tender for the 200MW fourth phase using a different type of solar technology, concentrated solar power. By 2021, about 25 per cent of the park will be completed.

"All projects included in the Mohammed bin Rashid Al Maktoum solar park adhere to the Dubai Clean Energy

Strategy 2050 to transform Dubai into a global centre for clean energy and green economy," Saeed Al Tayer, the managing director and chief executive of Dubai Electricity and Water




Authority, said in the statement. This strategy includes Dubai generating 7 per cent of its total power output from clean energy sources by 2020, 25 per cent by 2030 and 75 per cent by 2050.

This solar park has made headlines with its record-breaking low prices, which began with the Acwa Power-led second phase last year.

The 200MW project will generate power costing 5.84 US cents per kilowatt hour over the next 25 years, which was at the time the world’s cheapest price for solar power.

That price was nearly halved this summer by Abu Dhabi’s clean energy company, Masdar, and its Spanish partners, Fotowatio Renewable Ventures and Gransolar Group. The consortium submitted and won the third phase of the park for another world record breaking price of 2.99 US cents per kWh.




GCC budgets focus on non-oil diversification and fiscal consolidation Gulf Time

We saw last week Saudi Arabia announcing its budget for 2017. It plans to spend 890bn Saudi riyals in 2017, which is 8% higher than the actual spending in 2016.

Saudi is to spend 268bn riyals on its National Transformation Plan through 2020; of which 42bn is allocated for 2017. The projected revenue is at 692bn riyals in 2016, which is 31% higher than the actual revenue of 2016.

The year 2017 has a fiscal deficit projected at 7.7% of the Gross Domestic Product, or 198bn riyals. The fiscal deficit is to be financed by issuing debt and drawing from reserves.

The oil revenue in 2017 is expected to be 480bn riyals, which is a 46% increase over the oil revenue of 2016. The non-oil revenue in 2017 is expected to be 212bn riyals, which is 6.5% increase over the non-oil revenue of 2016.

The government is focused on increasing non-oil revenue, which expects it to account for 50% of the total by 2020. “Selective taxes” on tobacco, soft- and energy-drinks are to be imposed during 2017. The government is to introduce 5% value-added tax in 2018. It has no plans to impose taxes on nationals and residents, or to tax Saudi companies. However, the government is to introduce a “small” fee on foreign residents.

The public debt is estimated at 12.3% of GDP in 2016. Total debt reached 316.5bn riyals. The Saudi budget presumes that a better oil price scenario in 2017 will improve revenue and boost spending, based on recent Opec decisions. We need to look out for this scenario in 2017.

The UAE cabinet approved an AED48.7bn ($13.3bn) spending in the federal budget for 2017 with a revenue projection of Dh47.696bn. Around AED25.2bn has been allocated to sectors affecting the lives of the UAE citizens. While AED10.2bn has been earmarked for the general and higher education sector, AED4.2bn has been set aside for healthcare, AED4bn for pensions, AED3.2bn to social development and AED1.6bn has been allocated for housing.

Dubai has approved a spending of AED47.3bn in its 2017 budget, which will create more than 3,500 jobs for emiratis. The revenue is expected to be AED49.8bn.

The 2017 budget has a deficit of AED2.5bn, which represents 0.6% of the GDP of Dubai. The 2017 budget will see spending on infrastructure next year rising by 27% as the emirate continues to launch development projects ahead of its hosting of the World Expo in 2020.

Kuwait’s budget for 2016-17 sees revenue at KD10.2bn. The allocated expenditures in the budget were reduced by 1.5% to KD18.9bn. The fiscal is at KD8.7bn or estimated at a deficit of 13% of the GDP assuming oil price at $35 per barrel. The National Assembly approved the financing part




of the budget deficit by raising KD5bn in local and international bonds and sukuk during the financial year 2016-17. Expenditures on goods and services and projects, maintenance and land purchases are set to decline by 14% and 13% respectively, compared to previous year.

Qatar’s 2017 budget has budgeted revenues of QR170.1bn and an expenditure of QR198.4bn, thus expecting to post a deficit of QR28.3bn. The budget has been based on an oil price assumption of $45 per barrel.

The shortfall is expected to be covered by issuing debt instruments in the local and international financial markets, while maintaining its reserves and investments. The projected deficit in the 2017 budget was due to “a combination of low energy prices and a period of high development expenditure.

Total allocation for key sectors such as health, education and infrastructure (QR87.1bn) made up nearly 44% of the total expenditure in the 2017 budget. Funds amounting to QR24.5bn have been allocated to the health sector, representing 12.3% of total expenditure in 2017 budget. The government also continues to focus on education, allocating QR20.6bn to the sector, which represents 10.4% of the total expenditure.

Transportation and infrastructure projects, which represented a main pillar of enhancing sustainable development, have been allocated QR42bn, representing 21.2% of the total budgeted expenditure.

Funds were allocated to rail projects worth QR10bn and for Hamad Port, along with a large number of roads including the Lusail road, Al Rayyan road, Dukhan road, the new ring road for trucks and the new Al Khor road. Infrastructure projects include land reclamation in North and West Doha, Al Khor, Al Mashaf, Al Wakrah and Al Wukair.

On the whole, the GCC budgets have emphasised on non-oil diversification and fiscal consolidation.




Qatar: Nebras Power acquires 35.5% stake in PT Paiton Energy Gul Times

Doha-headquartered Nebras Power recently completed, through its wholly owned subsidiary Nebras Power Netherland BV, the acquisition of a 35.5% stake in PT Paiton Energy.

PT Paiton Energy owns a 2,045 MW thermal power plant in East Java, which is the first and largest Independent Power Producer (IPP) in Indonesia, representing 4% of the county’s total installed generation capacity.

Paiton Energy sells the entire capacity and output of its power plant under two long term power purchase agreements with PT Perusahaan Listrik Negara (Persero)'s (PLN), the Indonesian state-owned vertically integrated electricity utility.

The remaining 64.5% equity stake in PT Paiton Energy is held by well-known international and local utilities and power development companies.

Nebras has also acquired a 35% stake in IPM ASIA Pte which owns 84% of PT IPM Operation and Maintenance Indonesia (PT IPMOMI), the entity responsible for operation and maintenance of Paiton power plant.

The acquisition of Paiton Energy represents Nebras’ first investment in the Indonesian power market and a significant step forward in Nebras’ vision to become a leading international power company.

On the transaction, Fahad Hamad al-Mohannadi, Nebras chairman, said, “We are delighted to announce the completion of this acquisition, which allows us to add a remarkable generation asset to our portfolio and opens up a bright future for Nebras’ investments in the Indonesian and South East Asian markets. Nebras operates very closely with its shareholders and enjoys their full support as well as the support of the Board of Directors. Nebras aims at building an investment portfolio of more than 5GW net by the next five years and plays a key role under Qatar’s diversification strategy.”

Khalid Mohammed Jolo, Nebras CEO, stated, “This acquisition demonstrates Nebras’ commitment to its long-term strategy of investing in high quality assets with investment grade off-takers. It also reflects our confidence in the Indonesian market. I congratulate the entire Nebras team for the successful completion of this landmark transaction and I express my profound gratitude to the shareholders and the Board of Directors for their continuous support.”

Faisal al-Siddiqi, director (Business Development), said, “The acquisition of this significant equity stake in Paiton Energy provides us with an excellent opportunity to invest in a secure and profitable project that offers immediate cash flow and substantial value addition to our shareholders”.




Kuwait to sell 50pc stake in major utility project Kuwait's government plans to sell 50 per cent shares in its Az-Zour North One Independent Water & Power Project (IWPP) to the public by the middle of next year, reported the state news agency Kuna.

The $1.7-billion Az-Zour North One project located about 100 km south of capital Kuwait City, began full commercial operations last month and is now gearing up for its debut public issue, it stated.

The gas-fired combined cycle power and desalination plant has a 1,500 MW capacity.

It is 40 per cent owned by three partners: France's Engie , Japan's Sum itomo Corporation and Kuwaiti firm AH Al Sagar & Brothers, while the rest of the stake is with Kuwait's sovereign wealth fund KIA, the Public Institution for Social Security, and the PPP body Kuwait Authority for Partnership Projects (KAPP), said the state new agency. Built on the public-private partnership (PPP) model, the Az-Zour North One boasts a daily capacity of about 480,000 tonnes, accounting for 12 per cent of the installed generation capacity and about 23 per cent of the installed desalination capacity in Kuwait. A long-term 40-year Energy Conversion and Water Purchase Agreement was sealed in 2013 by the government with the partners and the plant was completed on schedule in under three years from the start of construction on November 26, said the Kuna report. Under this, all of the power and water generated through the project will be supplied to the Ministry of Electricity and Water of Kuwait. As per the deal, the government is mandated to sell 50 per cent of its ownership to Kuwaiti citizens, through an IPO. However, it will retain 10 per cent stake following the IPO, the report added.




Turkey: Engie: Turkey’s first FSRU inaugurated France’s Engie, and the Turkish construction companies Kolin and Kalyon have inaugurated the Etki LNG terminal, the country’s first FSRU-based import terminal located close to Çakmakli, Izmir.

Engie has been selected by project developers Kolin and Kalyon to deliver the fast-track FSRU based solution, and the company committed the 145,000-cbm Neptune, one of the two FSRU of its fleet, to the project.

The vessel is owned by Höegh LNG Partners (50 percent), MOL (48.5 percent) and Tokyo LNG Tanker (1.5 percent), and is under a long-term charter with Engie. The overall infrastructure developed by Kolin and Kalyon includes a jetty and an onshore gas pipeline to connect the terminal to the national gas transport grid, operated by Botas. The terminal’s development, from the final investment decision to completion took six and a half months, Engie said. The Neptune arrived at Etki LNG terminal berth on December 11 fully loaded with LNG and proceeded immediately with commissioning operations, the statement reads.

With a capacity of up to 20 million cubic meters per day of gas send-out, the new Etki LNG terminal will contribute to Turkey’s natural gas security of supply, especially in the winter period. It will complement Turkey’s two existing onshore LNG terminals, enhancing the country’s diversification of gas import structures as well as supply sources.




NewBase 26 December - 2016 Khaled Al Awadi

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

Investors Betting on Oil Price Drop Flee as Production Cuts Near by Bloomberg - Mark Shenk

Oil investors seem to have less reason to doubt that OPEC and other producers will make the cuts needed to balance the market.

Money managers trimmed bets on falling West Texas Intermediate crude prices to the lowest level since August 2014 as the Organization of Petroleum Exporting Countries and other crude-exporters prepare to start curbing output in January. Oil market volatility dropped to the lowest level in more than two years on Dec. 20 and futures settled at a 17-month high on Friday.

“People are excited that OPEC is going to hold firm and there will be a substantial reduction in inventories,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by phone. “The market should rebalance in 2017.”

Hedge funds reduced short positions, or wagers WTI will drop, by 10 percent in the week ended Dec. 20, U.S. Commodity Futures Trading Commission data show. WTI declined 1.4 percent to $52.23 a barrel in the report week. Prices settled at $53.02 a barrel in New York on Friday, the highest close since July 2015.

OPEC agreed to reduce its supplies by 1.2 million barrels a day, while 11 non-members including Russia and Kazakhstan pledged to curb output by almost 600,000 a day.

Oil price special

coverage




“The market is fulling embracing the OPEC, non-OPEC agreement,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “They are being given the benefit of the doubt now. The big test will come with the new year when we’ll see if they make the promised cuts.”

Confident Ministers

Oil prices are set to recover next year as OPEC fulfills its output agreement, Saudi Arabia’s Energy Minister Khalid Al-Falih said in Riyadh on Dec. 22. Al-Falih’s outlook was echoed by comments made by his counterpart from the United Arab Emirates, Energy Minister Suhail Al Mazrouei, who also predicted the same day from Abu Dhabi that OPEC’s actions will result in higher prices in 2017.

Money managers’ short position in WTI dropped by 5,699 futures and options to 50,613, a fifth week of decreases. Longs, or bets the benchmark will rise, slipped 0.8 percent. The resulting net-long position climbed 1 percent to the highest level since since July 2014.

“This represents the market being in an overbought situation,” Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by phone. “They are very well prepared for a rise in prices, but are left vulnerable for any negative shocks.”

Fuel Markets

In fuel markets, net-bullish bets on gasoline rose 11 percent to 42,879 contracts, the highest since February 2015, as futures advanced 2.8 percent in the report week. Money managers increased net-bullish wagers on ultra low sulfur diesel by 1.6 percent to 27,406 contracts, the highest since July 2014, as futures slipped 0.4 percent.

U.S. oil companies had been using the rally to hedge their price risk for the next two years, potentially boosting output next year. Producers’ short positions, protecting against a drop in prices, decreased to 622,395 contracts, the first decline in four weeks. The number of bearish wagers had climbed to the highest since August 2007 in the prior week.

“The shale producers rushed in at the first sign of viability,” Kilduff said. “That’s played out. They locked in their profits and are now waiting to see what happens before hedging more.”




NewBase Special Coverage

News Agencies News Release 26 Dec. 2016

Obama oil pipeline rules face uncertain future under Trump revisions sought by the petroleum industry could make the rule largely ineffective

+ AP

President Barack Obama’s administration is expected to push through long-delayed safety measures for the nation’s sprawling network of oil pipelines in its final days, despite resistance from industry and concern that incoming president Donald Trump may scuttle them.

The measures are aimed at preventing increasingly frequent accidents such as a 176,000-gallon spill that fouled a North Dakota creek earlier this month. Thousands more accidents over the past decade caused $2.5 billion in damages nationwide and dumped almost 38 million gallons of fuels.

Fights over pipelines have intensified in recent years, illustrated by the dispute over TransCanada’s Keystone XL plan and efforts by American Indians to stop the Dakota Access Pipeline from crossing beneath the Missouri River near the Standing Rock Sioux Reservation.

The US Department of Transportation proposal covers roughly 200,000 miles of lines that criss-cross the country and carry crude, gasoline and other hazardous liquids.

Environmental and safety advocates have criticised the agency’s commitment to tightening oversight of that network after a key safety feature — automatic valves that quickly shut down ruptured lines — was omitted from a draft rule published in 2015.

Further revisions sought by the petroleum industry could make the rule largely ineffective, said Carl Weimer with the Pipeline Safety Trust. But keeping the proposal intact would expose it to a legal challenge or reversal by a Republican-controlled Congress and Trump, an enthusiastic advocate for fossil fuels whose administration would enforce the new safety provisions, Weimer added.

“We already viewed it as an incremental step. If they water it down at all or extend the timelines, it’s going to be an even smaller step,” he said.

Regulators began crafting the new rule after a 2010 Michigan pipeline break released almost 1 million gallons of crude into the Kalamazoo River. It’s languished amid industry criticisms, interventions from Congress and the bureaucratic inertia of the federal regulatory process.

A recent boom in domestic drilling saw accident rates for pipelines increase by roughly a third. The number of hazardous liquid pipeline accidents in the US increased from 350 in 2010 to 462 in 2015.




The Transportation Department proposal calls for tougher inspection and repair criteria, leak detection systems on more lines and other measures to cut risk. Companies also would be required to inspect lines after flooding or other extreme events, a provision adopted after a 2011 ExxonMobil pipeline break spilt 63,000 gallons of crude into Montana’s Yellowstone River.

It’s currently under review by the White House Office of Management and Budget. Final adoption is anticipated in late December, said Allie Aguilera, government affairs director of the Transportation Department’s Pipeline and Hazardous Materials Safety Administration.

Industry representatives argue it would cost companies $600 million a year and almost $5 billion over the next decade. That’s almost 30 times the government’s estimate of $22.5 million annually.

Association of Oil Pipe Lines Vice President John Stoody said the rule would force pipeline owners to immediately repair lines with microscopic cracks or traces of corrosion. Currently, the industry is allowed to monitor smaller defects and schedule repairs later.

“It has the potential to distract us away from higher-priority safety issues,” Stoody said of the more stringent repair criteria.

Advocates say the rule is particularly important for rural areas. Current regulations apply primarily to lines in “high consequence areas” with large populations or environmentally sensitive features such as drinking water supplies.

Lines outside those areas are not required to be inspected with mechanical devices known as “pipeline pigs,” which travel inside lines looking for flaws.

“This is the first time (the Department of Transportation) is saying you have to inspect them” using the devices, Weimer said.

The Bellingham, Washington-based safety trust was formed after three children were killed when a gasoline pipeline broke in 1999, leaking fuel for 1= hours before it exploded.

The recent 176,000-gallon pipeline spill near Belfield, North Dakota occurred outside a high consequence area.

Federal investigators said Wednesday that a leak detection system on the Belle Fourche Pipeline Co. line had failed to detect any problems before a rancher discovered the spill on Dec. 5. The company was ordered by the Transportation Department to make improvements to that detection system before re-starting the line.

It’s unclear how long it had been leaking. The oil travelled 4= miles down a tributary of the Little Missouri River, investigators said. About 76,000 gallons had been recovered as of Tuesday, according to company spokeswoman Wendy Owen.




A third-party vendor had used a pipeline pig to inspect the line in April. The results were being reviewed to make sure the company repaired any flaws that were found, investigators said.

The 6-inch line can carry up to 1 million gallons of crude daily. Belle Fourche is a subsidiary of True Companies of Casper, Wyoming, which has a lengthy history of accidents including a January 2015 spill into the Yellowstone River.

Belle Fourche is a member of the American Petroleum Institute, which acknowledged it has been seeking revisions to the administration’s safety proposal but declined to specify the changes it wants.

In a 65-page cost-benefit analysis, the petroleum institute chided federal officials for underestimating the costs and amount of work needed for companies to comply. The group described the rule as a “significant expansion of regulatory oversight.”

Minimal federal oversight of pipelines in rural areas has left officials in some states overwhelmed with the task of policing the industry.

Pressured by landowners, farmers and environmentalists, North Dakota will put a state rule into effect Jan. 1 to increase inspections of smaller pipelines known as gathering lines. The federal proposal requires only that companies document spills from the lines.

Kevin Pranis, a spokesman for the Laborers District Council of Minnesota and North Dakota,

which represents some workers building the four-state, $3.8 billion Dakota Access Pipeline, said his group welcomes “sensible” regulation for the industry.

“The pipeline industry is under scrutiny like never before,” Pranis said.




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

Your partner in Energy Services

NewBase energy news is produced daily (Sunday to Thursday) and sponsored by Hawk Energy Service –

Dubai, UAE.

For additional free subscription emails please contact Hawk Energy

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 25 years of experience in the Oil & Gas sector. Currently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years, he has developed great experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas transportation, operation & maintenance

agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcasted internationally, via GCC leading satellite Channels.

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

NewBase December 2015 K. Al Awadi