New base energy news issue 936 dated 16 october 2016

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NewBase Energy News 16 October 2016 - Issue No. 936 Edited & Produced by: Khaled Al Awadi

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

Saudi Aramco awards long-term agreement to NPCC of UAE

(WAM) -- Saudi Aramco's offshore projects department has recently awarded a long-term agreement (LTA) to National Petroleum Construction Company (NPCC) of Abu Dhabi for the execution of its offshore development programme.

It is the fifth LTA awarded by Saudi Aramco, with four earlier LTAs awarded in June 2015 to various engineering, procurement, fabrication and offshore installation (EPIC) contractors. The latest LTA was signed by Tofiq Gabsani, Saudi Aramco project management executive director and Aqeel Madhi, CEO of NPCC.

Mr. Madhi said, "It is a great honour and a great opportunity to be part of the LTA for Saudi Aramco’s offshore projects. We consider Saudi Aramco a strategic partner for us, and will spare no effort to ensure we meet the expectations of Saudi Aramco in terms of performance, quality and adherence to delivery schedule considering that NPCC have a good record in providing services according to the highest standards and foremost to achieve the aspirations of the IKTVA programme."

Under the LTAs, contractors will be entrusted with the responsibility to deliver a huge number of offshore oil and gas producing platforms, tie-in platforms, pipelines, power cables, and all the related facilities required under the current Master Plan for Saudi Aramco's offshore fields. The long term contracts have a fixed duration of six years with options to be extended for up to twelve years in total.

Ahmad Al Saadi, Senior Vice President of Saudi Aramco’s Technical Services said, "This fifth strategic LTA is needed for the successful execution of the complex and extensive offshore projects to be completed in the offshore Oil and Gas fields in the Arabian Gulf, all within an aggressive schedule."

He also underlined the importance of local procurement and working with local companies, contractors and employing Saudis as outlined in the company’s In-Kingdom Total Value Add (IKTVA) programme.




Saudi ACWA Power aims to build 340 MW wind plant in Turkey By Reuters

Saudi Arabia-based power and water project developer ACWA Power is aiming to build a 340 megawatt (MW) wind power plant in Turkey, the head of its Turkish has said, as Riyadh and Ankara seek to deepen their energy ties. ACWA is a new entrant to the burgeoning Turkish electricity market, where demand is growing 4-5 percent annually. It is already building a 950 MW gas power plant near the capital Ankara, due to be operational in the second quarter next year.

Abid Hussain Malik, head of ACWA Power's Turkish unit, said in an interview late on Wednesday that the company wants to diversify into renewables in Turkey. "(Provided) that the licence is awarded this year as we project, we want to invest in a 340 MW capacity wind power plant," he said. Turkey regularly allocates renewable power investment licences but companies are usually awarded less than they ask for because investment demand outstrips government quotas. In another sign of deepening ties, Saudi Aramco signed memoranda of understanding on Tuesday with 18 Turkish firms primarily in construction, power generation and related services, enabling them to bid for Aramco projects Oman to move ahead with large-scale solar in 2017




Oman to move ahead with large-scale solar in 2017 Oman observer - Conrad Prabhu –

After a hiatus spanning several years, commercial scale renewable energy development is expected to make headway in 2017 with Oman’s power sector authorities planning to appoint a consultant to assist in the tendering of the nation’s first large-scale solar project.

The tendering process, according to a top official of the Authority for Electricity Regulation (Oman), will be overseen by the Oman Power and Water Procurement Company (OPWP) in line with its mandate as the procurer of all new power generation and related water desalination capacity.

“OPWP at this point in time is working on the first stages of tendering for consultancy services for a large-scale solar plant,” the Authority’s Executive Director Qais Saud al Zakwani (pictured) said.

“Usually, what OPWP does when it comes to conventional power, it hires consultants to put in place the technical, legal and financial parameters for the (tender) terms of reference. OPWP will now hire consultants to do the same thing for large-scale renewable projects. The process will go forward in 2017,” he added in comments to the Observer.

The move bodes well for the launch of the Sultanate’s first commercial-scale solar energy based power plant envisaging an aggregate 200 MW of capacity and procured on the lines of an Independent Power Project (IPP). Two locations in Dakhiliyah Governorate — Adam and Manah — have been identified as prospective sites for the establishment of a grid-connected large-scale renewable energy scheme based on a combination of concentrated solar power and photovoltaic technologies.

revealed recently that the government had given its ‘approval in concept’ of the construction of commercial scale renewable energy schemes, provided they meet with certain technical and economic criteria.

The state-owned entity had stated in its latest 7-Year Outlook Statement, covering the 2016-2022 timeframe, that it was working with the regulator to specify the evaluation terms that will enable large-scale, grid-connected projects to participate in competitive tenders for generation supply.

Speaking to the Observer, Al Zakwani also highlighted progress being achieved by the power sector in securing critical generation, transmission and distribution assets against potential cyber attacks.

“The cyber-security initiative is progressing very well,” the Executive Director said. “Implementation began at the beginning of this year, with companies given six months to put their cyber-security plans in place, as well as building competencies on cyber-security matters within their respective organisations. We are very happy with the feedback received about this initiative, and the level of importance given to this issue by the companies.”

All of the companies covered by the initiative have also submitted their strategies to the Authority on how they intend to implement cyber-security measures across their assets, he said.

Commenting on plans by the government to restructure the water sector, the Executive Director stated: “There’s a decision to restructure the water sector whereby this sector will be regulated in similar fashion to the electricity sector; however who the regulator is something that will be determined as well.”




DNO completes 3 oil wells in Iraq’s Tawke field DNO

DNO ASA, the Norwegian oil and gas operator, has reported the completion of three new production wells at the flagship Tawke field in the Kurdistan region of Iraq as part of a stepped up drilling programme kicked off in July. The Tawke-31 well, targeting the main Cretaceous reservoir will be brought on production following an acid stimulation program. Two additional wells targeting the shallow Jeribe reservoir, Tawke-33 and Tawke-34, are also being readied for production.

A fourth well, Tawke-37, will be spud next week, a company statement said. The four wells are expected to cost less than $20 million in total and add about 10 per cent to field output capacity. Earlier this month the company also spudded the Peshkabir-2 well to appraise the Jurassic reservoir and explore the deeper Cretaceous horizon on a previous discovery to the west of the main Tawke field. This well marks the completion of the current drilling program at the Tawke license which was initiated on the back of monthly export payments from the Kurdistan Regional Government. Plans to engage a third drilling rig were dropped in September though the company expects to re-start investments to boost production to a targeted level of 135,000 barrels of oil per day (bopd) following the resumption of regular and predictable payments. Tawke production during the third quarter averaged 109,159 bopd, of which 108,759 bopd was delivered for export through Turkey.




Mozambique: CGG awarded multi-client projects offshore Source: CGG

CGG has been awarded an extensive multi-client program by the Instituto Nacional de Petroleo (INP) to acquire seismic data offshore Mozambique. The multi-survey program is designed to improve industry insight into the region’s geology and provide oil and gas companies with a greater level of understanding of the country’s prospectivity.

The program includes a 2D survey of over 6,550 km in the offshore Rovuma basin, including blocks R5-A, R5-B and R5-C, and a large 3D survey over the Beira High in the Zambezi Delta. The 3D survey is expected to be up to 40,000 km², subject to pre-commitment. It will cover blocks Z5-C and Z5-D and surrounding open acreagein this deltaic area which is believed to be prospective. CGG has also been awarded anonshore airborne gravity and magnetic survey in the Southern Mozambique Basin.

The proposed multi-client seismic program in the Mozambique Zambezi region will form part of a comprehensive, fully integrated geoscience package that will give participating companies a better overall understanding of the region. Marine gravity and magnetic data will be acquired simultaneously with the seismic to aid regional interpretation.

The interpretive phase of the program will benefit from the full range of geoscience expertise from CGG’s Geology, Geophysics & Reservoir businesses. This will include geological and remote sensing expertise from Robertson and NPA Satellite Mapping.

Jean-Georges Malcor, CEO, CGG, said:

'CGG has a long track record of delivering successful multi-client programs in the Sub-Saharan Africa region and this award underlines the extent to which our reputation for high-quality services and delivering value to our clients is recognized not just by oil and gas companies but also by national governments. As our first multi-client projects in Mozambique, these awards fit well with CGG’s long-term multi-client strategy to provide our clients with the most advanced understanding of the subsurface across the world’s key basins. The 5th License Round award process undertaken by the INP in 2015 saw a high level of interest in the Zambezi region and we believe our multi-client projects will highlight the exploration upside potential.'




Kenya Tullow Seeks Truckers for Early Shipments of First Oil Bloomberg - Helen Nyambura-Mwaura

Tullow Oil Plc’s Kenyan unit said it’s seeking trucking companies to transport crude from northwestern fields to the port city of Mombasa as the East African nation rushes to export its first oil by mid-2017.

The work will involve the trucking of crude in insulated containers from a production facility near Lokichar, Turkana county, to storage facilities run by Kenya Petroleum Refineries Ltd., Tullow Kenya BV said Friday in an advertisement in the Nairobi-based Daily Nation newspaper. It said it plans to lease 100 ISO T11 standard insulated containers with a minimum fluid capacity of 25,000 liters.

“It’s a pilot scheme ahead of full field development to help the government of Kenya and the Kenya joint-venture partners better understand the technical and logistical requirements of oil production,” Tullow spokesman George Cazenove said in an e-mailed response to questions. The company has discovered a waxy crude that can harden if not heated, so “exactly what temperature the oil needs to be transported at will form an important part” of the pilot project, he said.

Kenya, which has about 750 million barrels of recoverable reserves, plans to construct a 865-kilometer (538-mile) pipeline linking the northern fields to a port being built on its Indian Ocean coastline by 2021. In the meantime, the government says initial production of about 2,000

barrels per day, expected by June next year, will be hauled by road and rail.

Lokichar Basin

Vancouver-based Africa Oil Corp. estimates the South Lokichar basin, about 510 kilometers northwest of the capital, Nairobi, may contain as much as 1.63 billion barrels of oil. Kenya’s government has previously said the northern oil would be transported by road from Lokichar to Eldoret, a thoroughfare it’s upgrading for about 3.2 billion shillings ($31.6 million), then taken to Mombasa by rail.

While Kenya has about 60,000 barrels ready for export, it needs oil prices at $40-$50 per barrel to avoid making losses as the cost of road-shipping is estimated at $30-$34 a barrel, according to Andrew Kamau, the principal secretary for petroleum. Renaissance Capital’s chief economist, Charles Robertson, has said Kenya’s oil may not be economically viable even at $50.

Kenya is planning its own, shorter pipeline after Uganda abandoned an initial proposal for a joint line linking its oil-rich western Hoima region to Lamu port in Kenya. That conduit’s cost is estimated at $5 billion by Nagoya, Japan-based Toyota Tsusho Corp. Uganda prefers a $4 billion pipeline across Tanzania to that country’s Tanga port.




India wants gas to power economic growth The National - Rebecca Bundhun

India is so committed to getting its population to switch to natural gas that a few weeks ago the government launched a catchy Bollywood-style song to promote the fuel.

India’s appetite for liquefied natural gas (LNG) is set to surge over the coming years, driven by the country’s need for power, sharply lower prices of the fuel and a push by the government to increase the usage of gas as a proportion of its overall energy mix. Natural gas is considered to be a relatively clean fuel.

"India is now emerging as the largest driver of global LNG demand growth," according to a report published by financial group Citi this month. India is the fourth-biggest importer of LNG after Japan, South Korea and China with its imports coming primarily from Qatar.

The country’s expanding economy and urbanisation are driving India’s rising energy needs.

Demand has been rising rapidly and Citi forecasts that India’s LNG demand could almost double over the next four years amid a glut in global supply. It increased from 14 million metric tonnes to 16 million tonnes in the last financial year, which ended in March, over the previous financial year, and it has the potential to reach 30 million tonnes in four years, according to the bank. By 2025, demand is set to increase to 50 million tonnes a year.

"The government is also doing its bit, putting in place measures to expand gas infrastructure, including smart cities, new pipelines and terminals," Citi says. It adds that the "oncoming glut" in LNG globally means that it is likely to be a buyers’ market over the next few years. LNG spot prices are down by 60 per cent compared with two years ago.

Power is the biggest driver of the demand for LNG in India, serving as a substitute for coal in electricity generation, and it is also used in the production of fertilisers. The bank expects India’s




dependence on gas imports, which have risen to 45 per cent from 23 per cent over the past five years, to rise to 51 per cent over the next three years.

Last month, Dharmendra Pradhan, the country’s minister for petroleum and natural gas, launched the #Gas4India campaign to increase the country’s use of gas. The campaign has a Facebook page and theme tune.

"Besides the move to enhance gas production, the government is promoting a nationwide gas grid and setting up gas infrastructure," Mr Pradhan says. "New LNG terminals are also coming up. India has entered into long-term contracts and acquired assets abroad to ensure the unhindered supply of gas at reasonable prices."

The aim is to more than double the share of natural gas in India’s energy basket to 15 per cent from 6.5 per cent. The country is under pressure from the international community to reduce its carbon emissions and a switch to gas could help in this process.

"India is well behind most of its developed and developing nation counterparts in terms of gas usage, especially at the retail level. Almost two-thirds of India’s gas is still consumed by the fertiliser and power industries," according to Citi. In Thailand, for example, natural gas comprises about 40 per cent of the energy mix, while in Argentina it is just below 50 per cent, while the UAE is at about 60 per cent.

"For instance, most of rural India still relies on traditional sources of cooking fuels – wood, cow dung, kerosene, biomass – while urban India primarily relies on liquefied petroleum gas," according to Citi. "While natural gas can be a potent source of energy, which can be used for various purposes such as cooking, transportation, industrial uses, etc., this would need to be driven by enabling gas supply to households as well as industries, for which a robust city gas distribution network would need to be set up."

Qatar is by far the biggest supplier of LNG to India, at 8.5 million tonnes a year. RasGas of Qatar supplies the fuel to India’s Petronet under a 25-year contract, which started in 2004. This year, India managed to renegotiate the price to US$5 a unit from $12.

"They lowered the price and increased the volume, so it sounds like a healthier relationship," says Akshay Randeva, the director of strategy and business intelligence at the Qatar Financial Centre Authority.

Exporters of natural gas are facing increased competition amid heavy global supplies. Countries such as Australia and the US are also major exporters of LNG. Projections by the International Energy Agency show that Australia and Africa will each be providing more LNG to India than Qatar by 2030.

It emerged earlier this year that India is looking at setting up an LNG terminal in Iran to ship natural gas from Iran to India.

"Despite its massive gas reserves, Mena’s role in the global supply of natural gas is diminishing," according to Apicorp Energy Research. "A major factor behind this trend is the increasing amounts of LNG becoming available from new sources of supply, forcing the major LNG exporters in Mena to adjust their export strategies in order to maintain their market share in Europe and Asia."

But India’s lack of infrastructure to support the natural gas segment is a hurdle, analysts say. "The major challenges are the port facilities to discharge and process the LNG," says Mike van Croonenburg, the chief executive of Petrol Storage Broker, a project-management consultancy.




Kazakhstan: Oil From 50 B$ Kashagan Field Starts Exporting Bloomberg - Nariman Gizitdinov

Kashagan, a vast oil field in the Caspian Sea, sent its first crude for export after about 16 years in development and more than $50 billion of investments.

The venture loaded 26,500 metric tons of crude for export into the country’s pipelines, Kazakhstan’s Energy Ministry said in an e-mailed statement Friday. Of that, 7,700 tons was sent to the Caspian Pipeline Consortium. Reaching stable production will take “some time” as commissioning work continues both offshore and onshore, the ministry said.

The project has been plagued by multiple delays and cost overruns. A 2008 budget estimate of $38 billion jumped to $53 billion by the end of last year as the partners replaced undersea links after sulfurous gas corroded and cracked the pipes after a brief startup in 2013. The crude from Kashagan is reaching an already saturated market, with prices at less than half the level of three years ago. Expectations for the field’s exports even prompted OPEC to flip supply predictions for next year.

“Restarting production even in this low oil price environment is good because it means beginning to see some returns on that massive investment,” Andrew Neff, Paris-based principal analyst at IHS Energy, said by e-mail. “The real payoff will be phase two,” which has the potential to increase output to 1 million barrels a day, he said.

North Caspian Operating Co., which took over running of the field from Eni SpA in 2009, said it’s working to gradually increase production capacity to a target level of 370,000 barrels a day by the




end of 2017. U.K. consulting firm Wood Mackenzie Ltd. forecasts only about 154,000 barrels a day from the field on average next year.

Shares in Eni rose 2.4 percent to 13.48 euros Friday at 1.31 p.m. in Milan. The Kazakh currency advanced 0.3 percent to 330.45 tenge per dollar in Almaty, the strongest since June.

Pipe Defects

Development of the offshore deposit, initially due to come on stream more than a decade ago, was prolonged by the need to build remote islands to support drilling equipment. Although production finally got going in September 2013, it was halted just weeks later because of the pipeline defects.

The global oil glut has seen crude prices sink to half their 2014 levels. Non-OPEC supply will grow by 240,000 barrels a day next year, the Organization of Petroleum Exporting Countries said Oct. 12. A month earlier it predicted a 200,000-barrel gain, and a month before that, a decline.

The ownership of Kashagan has shifted over the years. Kazakhstan has expanded its stake and currently holds 16.88 percent; Eni, Total SA, Royal Dutch Shell Plc and Exxon Mobil Corp. each own hold 16.81 percent. China National Petroleum Corp. has 8.33 percent and Japan’s Inpex Corp. has 7.56 percent.




US Energy-related CO2 emissions for first six months of 2016 are lowest since 1991..Source: U.S. Energy Information Administration, Monthly Energy Review

U.S. energy-related carbon dioxide (CO2) emissions totaled 2,530 million metric tons in the first six months of 2016. This was the lowest emissions level for the first six months of the year since 1991, as mild weather and changes in the fuels used to generate electricity contributed to the decline in energy-related emissions. EIA’s Short-Term Energy Outlook projects that energy-associated CO2 emissions will fall to 5,179 million metric tons in 2016, the lowest annual level since 1992.

Mild weather. In the first six months of 2016, the United States had the fewest heating degree days (an indicator of heating demand) since at least 1949, the earliest year for which EIA has monthly data for all 50 states.

Warmer weather during winter months reduces demand for heating fuels such as natural gas, distillate heating oil, and electricity. Overall, total primary energy consumption was 2% lower compared with the first six months of 2015. The decrease was most notable in the residential and electric power sectors, where primary energy consumption decreased 9% and 3%, respectively.




Changing fossil fuel consumption mix. Coal and natural gas consumption each decreased compared to the first six months of 2015. However, the decrease was greater for coal, which generates more carbon emissions when burned than natural gas. Coal consumption fell 18%, while natural gas consumption fell 1%. These declines more than offset a 1% increase in total petroleum consumption, which rose during that period as a result of low gasoline prices.

Increasing renewable energy consumption. Consumption of renewable fuels that do not produce carbon dioxide increased 9% during the first six months of 2016 compared with the same period in 2015. Wind energy, which saw the largest electricity generating capacity additions of any fuel in 2015, accounted for nearly half the increase.

Hydroelectric power, which has increased with the easing of drought conditions on the West Coast, accounted for 35% of the increase in consumption of renewable energy. Solar energy accounted for 13% of the increase and is expected to see the largest capacity additions of any fuel in 2016.

Source: U.S. Energy Information Administration, Monthly Energy Review




NewBase 16 October 2016 Khaled Al Awadi

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

Oil Prices settles with brent at $51.95 and WTI at $50.35, Reuters + Newbase

Crude oil prices fell on Friday as a stronger dollar weighed on the market and an industry report showed U.S. oil drillers continue to ramp up activity with prices holding above $50 a barrel. Global benchmark Brent crude fell 6 cents to $51.97 by 2:38 p.m. ET (1838 GMT), having risen as high as $52.55 earlier in the session. U.S. crude settled down 9 cents at $50.35 a barrel, closing the week up 1.1 percent.

Prices were little changed after Baker Hughes reported U.S. drillers added four oil rigs in the last week, marking the 15th increase in 16 weeks. The total number of oil rigs operating in U.S. fields stood at 432, compared with 595 at this time last year. The U.S. benchmark saw better support than Brent due to an extended outage on a pipeline capable of delivering 450,000 barrels per day of crude into the Cushing, Oklahoma delivery hub for WTI, traders said. Both Brent and WTI rose in the previous session, continuing their recent upward momentum, despite the U.S. government reporting the first domestic crude inventory build in six weeks. Market participants focused instead on larger-than-expected drawdowns in diesel, gasoline and other stockpiles reported by the U.S. Energy Information Administration.

Oil price special

coverage




But in the latest session, a rallying dollar, which rose nearly 0.5 percent, weighed on the greenback-denominated crude, making it costlier to holders of the euro and other currencies. Concerns about the near 5 million-barrel crude build reported by the EIA on Thursday also forced crude prices to retreat. "The fundamental backdrop is still bearish," said Commerzbank analyst Carsten Fritsch. "Every increase is driven by speculation and optimism," rather than an actual tightening of supplies, he said. U.S. crude's structure gained support from the extended outage of a pipeline capable of delivering 450,000 barrels per day of crude into Cushing, traders said. Oil prices have trended higher since Sept. 27, with Brent gaining about 13 percent and hitting one year highs above $53, after the Organization of the Petroleum Exporting Countries announced its first planned output cut in eight years. OPEC plans to rein in a global supply glut that forced crude to crash from mid-2014 highs above $100 and has asked other major producers, including Russia, to join in cutting output. However, lack of much detail in the initial agreement, such as how much each of the 14 members can pump and the scale of any contributions from non-OPEC countries, has left analysts skeptical. OPEC itself has been producing at record highs most of this year, making traders and investors skeptical of its target. "We are doubtful that OPEC's efforts, even if successful in achieving a targeted 32.5 million bpd in collective output, will prove sufficient to materially alter the global oil balance and deliver a substantial reduction in oil inventories," BNP Paribas said in a report.




Oil Rebound’s Dirty Little Secret Threatens U.S. Gas Bulls Christine Buurma Jonathan Crawford

One of the biggest threats to an extended rally in U.S. natural gas prices is lurking in the oil patch.

Gas production in most of the country has dropped amid cost-cutting. Not so in the Permian Basin, the nation’s biggest crude reservoir and one of the few places where drilling has remained profitable. Permian drillers led by Occidental Petroleum Corp. and Pioneer Natural Resources Co. are pumping more oil as prices rise, pushing natural gas extracted as a byproduct from the West Texas play to almost 7 billion cubic feet a day, Bloomberg Intelligence data show. That’s about 8 percent of U.S. supply.

The Permian’s resilience may blindside gas bulls who’ve nudged prices above $3 per million British thermal units for the first time in 16 months, following record demand during a hot summer and rising exports. At the same time, Permian drillers have added 45 rigs in three months, and a new discovery by Apache Corp. in the area promises to chase higher demand with a production surge starting in mid-2017.

“We’re drilling for oil in the Permian, but the dirty little secret is that there are also massive gas fields,” said Scott Hanold, an analyst at Royal Bank of Canada in Minneapolis, in a telephone interview. “The Permian is going to continue to grow, and it’s going to be the 900-pound gorilla.”

Apache’s discovery in the southern reaches of the Permian underscores the potential. The Houston-based crude producer estimates that two areas of the Alpine High finding can support 2,000 to 3,000 wells at oil prices of $50 a barrel and gas prices at $2.92 per million British thermal units, once production starts in the second half of 2017. Gas fell 5.8 cents to $3.283 on the New York Mercantile Exchange at 12:28 p.m. New York time.

The Permian is making a swift recovery from a rout in oil prices that battered the energy industry earlier this year, forcing producers to cut output. The 45 rigs added in the region over the past




three months compare with just two in the neighboring Eagle Ford shale play during the same period, data from Baker Hughes Inc. show.

That’s because the Permian’s unique geology allows explorers to extract more crude at lower cost, compared with other shale formations. Some wells in the region can break even with crude at $30 a barrel, among the lowest in the U.S, according to Will Foiles, an analyst at Bloomberg Intelligence in New York.

Since wells in some areas of the reservoir can produce more than 50 percent natural gas, based on Bloomberg Intelligence estimates, oil’s rally to a 15-month high will also unleash more of the heating and power-plant fuel on the U.S. market. West Texas Intermediate crude fell 0.7 percent to $50.10 in New York.

Bullish, Bearish

In the Permian, “the gas economics are totally tied to oil prices, and the higher the oil prices go, the higher the gas production will be,” Randall Collum, an analyst for Genscape Inc. in Sugar Land, Texas, said by phone. “Bullish oil prices are bearish for gas prices.”

Natural gas supplies from the Permian threaten to derail a rally that made the fuel one of the top-performing commodities in the second quarter. Just six months ago, a torrent of supply from shale formations pushed gas prices to the lowest since the 1990s after a mild winter, leaving stockpiles more than 50 percent above normal at the start of spring.

Power Plants

Gas prices have gained as production from gas-focused shale basins, including Appalachia’s Marcellus formation, dwindles and demand picks up. Power plants are burning more of the fuel as coal-fired generators shut, and gas exports to Mexico via pipeline have climbed to a record.

At the same time, Cheniere Energy Inc.’s Sabine Pass terminal in Louisiana is shipping cargoes of liquefied natural gas across the globe.

The boost in gas exports, combined with increased demand for the fuel from U.S. petrochemical manufacturers as that industry expands, has sparked concern that prices for domestic users will jump. Senators including Elizabeth Warren of Massachusetts are urging government officials to slow down approvals for new LNG export terminals.

‘Growing Demand’

While production in the Permian is rising, “it’s doing this against this background of growing demand that the market didn’t have to deal with in years past,” Nicholas Potter, an analyst at Barclays Plc in New York, said by phone.

Output from the Permian may catch the gas market unawares, however, as supplies are climbing even as production of the fuel remains an afterthought for drillers like Encana Corp. While gas is boosting the company’s profits in the basin, the company is targeting crude, Douglas Hock, a spokesman for the Calgary-based explorer, said in an e-mail. A spokesman for Occidental declined to comment, and Pioneer didn’t respond to a request for comment.

Apache estimates that its new discovery, called Alpine High, holds 75 trillion cubic feet of gas and 3 billion barrels of oil in just two formations in the play.

“If it’s successful, it’s going to produce a significant amount of gas, much more than you’ve seen from these other wells,” RBC’s Hanold said.




NewBase Special Coverage

News Agencies News Release 16 October 2016

Global demand for electricity to double by 2060

The global demand for electricity is set to double by 2060 thus leading to a significant expansion of global capacities, said a top official of global technology powerhouse Siemens. The global demand for electricity is set to double by 2060 thus leading to a significant expansion of global capacities, said Willi Meixner, the chief executive of Power and Gas Division, at global technology powerhouse Siemens. He was addressing the gathering at the World Energy Congress (WEC) 2016 in Istanbul, which concluded on October 13.

"At present around one billion people have no access to electricity globally. This seriously inhibits their long-term prospects as far as education and development are concerned," remarked Meixner.




Furthermore, according to United Nations estimates, the global population is set to increase to some 9.5 billion by the middle of this century. Meixner outlined the challenge: "If we are to ensure a reliable supply of affordable electric energy for the world's population in years to come, then over the next 35 years we have to integrate three times the energy consumption of China into our energy world." "This means that bringing resources, assets and people closely together in a digital world is an absolute must," said the top official. At the opening event of the foremost international energy forum, Meixner described the challenge posed by achieving an affordable, dependable and clean energy supply which would create an absolute minimum of CO2 emissions.

Meixner discussed with prominent representatives of companies and organizations, including the International Energy Agency and the World Wide Fund For Nature (WWF), the question of "Scenarios 2060: The Grand Transition". More than 55 countries have now ratified the agreement reached at the Paris World Climate Summit. This treaty involves a catalog of measures designed to bring about a substantial reduction in CO2 emissions. The objective of the World Climate Summit is to limit global warming




to well below 2°C. In addition to achieving the climate targets, a further goal is to make access to energy sources available to as many people as possible. According to him, the growing demand for efficiently generated power will lead to a significant expansion of global capacities. Siemens has calculated that by 2030 decentralized energy systems will account for almost one half of the additionally required capacities. In global terms, wind and solar power will play a prominent role in this scenario, since the cost of electricity generated from renewables has been reduced as a result of government intervention. Thus, installed capacities have increased significantly since the last WEC in 2013. The cost of photovoltaic energy fell by seven per cent annually between the year 2000 and 2015. As for offshore wind power, prices are expected to fall by one-third between 2015 and 2020. However, the expansion of renewable energy alone will not be sufficient. "In view of this increasing demand, we will only attain the goals we have set ourselves by gradually converting the existing power plants from coal to gas. If we were able to change things and turn all the world's coal-fired plants into gas-fired plants, we would reduce the amount of CO2 emissions by 40 per cent," stated Meixner. Expansion of the existing energy distribution networks into smart grids is essential in order to integrate all sources of energy. Only in this way can the flow of energy in several directions be controlled and fluctuations in supply balanced out by tapping into reserves of stored energy, he added. At the WEC, Siemens presented a number of technical papers dealing with the subject of futureproof energy supplies. In his award-winning paper, Patrice Bardon from Siemens Dresser-Rand business explained how a configurator determines the correct drive unit in LNG plants. The configurator enables plant operators to select the most efficient drive unit for their own specific process. It analyzes steam, industrial and aeroderivative gas turbines and electric motors. Zafer Gursoy of Siemens Turkey gave a presentation on technology for large gas turbine power plants, focusing on issues of environmental compatibility and the conservation of resources. He elaborated this on the basis of the Lausward combined cycle power plant and using the example of a mega project in Egypt, where Siemens is currently constructing three combined cycle power plants with a rating of 4.8 gigawatts each. In a further presentation, Howard Gooder of Siemens Financial Services explained how public institutions – in conjunction with private enterprises – are investing in clean energy projects based on wind, photovoltaic and natural gas and thus helping to achieve the goals of the Paris Climate Agreement.-




Nearly 200 nations agree binding deal to cut greenhouse gases Nearly 200 nations hammered out a legally binding deal to cut back on greenhouse gases used in refrigerators and air conditioners, a Rwandan minister announced to loud cheers on Saturday, in a major step against climate change.

The deal, which includes the world's two biggest economies, the United States and China, divides countries into three groups with different deadlines to reduce the use of factory-made hydrofluorocarbon (HFC) gases, which can be 10,000 times more powerful than carbon dioxide as greenhouse gases. "It's a monumental step forward," U.S. Secretary of State John Kerry said as he left the talks in the Rwandan capital of Kigali late on Friday.

As Rwanda's Minister for Natural Resources, Vincent Biruta, began spelling out the terms of the deal shortly after sunrise on Saturday, applause from negotiators who had been up all night drowned out his words.

Under the pact, developed nations, including much of Europe and the United States, commit to reducing their use of the gases incrementally, starting with a 10 percent cut by 2019 and reaching 85 percent by 2036.

Many wealthier nations have already begun to reduce their use of HFCs.

Two groups of developing countries will freeze their use of the gases by either 2024 or 2028, and then gradually reduce their use. India, Iran, Iraq, Pakistan and the Gulf countries will meet the later deadline.

They needed more time because they have fast-expanding middle classes and hot climates, and because India feared damaging its growing industries.

"Last year in Paris, we promised to keep the world safe from the worst effects of climate change. Today, we are following through on that promise," said U.N. environment chief Erik Solheim in a statement. United States Secretary of State, John Kerry delivers a speech during the 28th meeting of the Parties to the Montreal Protocol in Kigali, Rwanda on October 14, 2016.

The deal binding 197 nations crowns a wave of measures to help fight climate change this month. Last week, the 2015 Paris Agreement to curb climate-warming emissions passed its required threshold to enter into force after India, Canada and the European Parliament ratified it.

But unlike the Paris agreement, the Kigali deal is legally binding, has very specific timetables and has an agreement by rich countries to help poor countries adapt their technology. The United Nations says phasing out HFCs will cost billions of dollars.

But a quick reduction of HFCs could be a major contribution to slowing climate change, avoiding perhaps 0.5 degrees Celsius (0.9 Fahrenheit) of a projected rise in average temperatures by 2100, scientists say.

Environmental groups had called for an ambitious agreement on cutting HFCs to limit the damage from the roughly 1.6 billion new air conditioning units expected to come on stream by 2050, reflecting increased demand from an expanding middle class in Asia, Latin America and Africa.

The HFC talks build on the 1987 Montreal Protocol, which succeeded in phasing out the use of chlorofluorocarbons (CFCs), widely used at that time in refrigeration and aerosols.

The aim was to stop the depletion of the ozone layer, which shields the planet from ultraviolet rays linked to skin cancer and other conditions




IEA to Lift Solar, Wind Outlook After Decade of Underestimates Bloomberg - Jessica Shankleman Jess_Shankleman

The world’s most prominent energy forecaster will raise its outlook for wind and solar installations following a decade of underestimating growth in the renewables industry.

The International Energy Agency, which was established as a watchdog of the industry in the wake of the 1973 oil crisis, will “significantly” raise its estimates for renewables when it publishes its annual mid-term market report for the industry at the end of this month, a spokesman for Paris-based organization said.

The findings will feed into the World Energy Outlook report due in November, which is used by many forecasters as a starting point for trends in the industry. Although the IEA aims to provide its 29 member-nations impartial advice, it’s been criticized for publishing conservative estimates that failed to predict the rapid growth of wind and solar farms as a source of electricity.

“The IEA has significantly raised its estimates for the deployment of renewables compared with previous years reflecting major changes in energy policies around the world, such as the adoption of the Paris Agreement,” Jad Mouawad, the IEA spokesman, said by e-mail.

Bloomberg New Energy Finance and IHS Inc. are among the private forecasters along with investment banks that also assess world energy supply and demand.

The agency has been a key voice in guiding policymakers toward cleaning up the pollution blamed on global warming. Its annual outlook includes scenarios countries could adopt to keep global warming to the United Nations goal of 2 degrees Celsius (3.6 degrees Fahrenheit) since the industrial revolution.




This year’s forecasts seek to reflect the growing number of countries adopting climate change policies, as well as the global deal to curb carbon emissions and global warming agreed in Paris in December.




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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 16 October 2016 K. Al Awadi




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New base energy news issue 936 dated 16 october 2016