New base 574 special 02 april 2015

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

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NewBase 02 April 2015 - Issue No. 574 Khaled Al Awadi

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GCC rail network progress full steam ahead Saudi Gazette + NewBase

Detailed engineering and design for the next sections of the 2177km Gulf Cooperation Council (GCC) rail network will be completed this year, said Ramiz Al-Assar, senior transport specialist for the Middle East and North Africa with the World Bank’s Sustainable Development Department.

Al-Assar spoke at the first UIC conference on

railway interoperability, standardization,

and harmonization for the Middle East in Doha on March 31. “We will have a meeting of the GCC Railway expert working group in Abu Dhabi on May 11-14 to finalize

common guidelines for operation and institutional and

regulatory requirements,” Al-Assar told delegates. “We

hope to reach agreement on the master schedule in June. Detailed engineering design will be completed this year.” Etihad Rail has already completed its 120km coastal section in the United Arab Emirates and plans to launch the second stage soon of its 628km section of the GCC Railway. Al-Assar pointed out that Saudi Arabia has started construction of another 200km section and will need to build around 600km of new line. Qatar Rail expects to receive bids on April 6 to pre-qualify for a design and build contract for the first phase of its railway from Doha to the Saudi border, although the government has asked for the alignment to be altered to avoid a military base.




“A study will be completed in June for a railway causeway linking Dammam in Saudi Arabia with Bahrain where two stations are planned,” Al-Assar further said. “We are mandated to complete the project in 2018 and while there could be some slippage, because the project is split into relatively short sections in each country I believe it is achievable in two to three years,” he noted. The GCC Rail connection will provide member state with alternative export and import options. Rail will enable connections from and to ports south of the Strait of Hormuz, as well as other ports on the Arabian Sea. The Land Bridge in Saudi Arabia will give member states access to the Red Sea ports of Jeddah, Yanbu and Rabegh. Equally important from a strategic point of view is the fact that rail will provide an important alternative to sea trading routes, currently under threat by piracy. Piracy impacts supply chains of the Arabian Gulf through additional cost, risks and deceased customer confidence. Apart from the obvious negative impact on any one vessel, there is also an economic domino effect throughout the entire vertical value chain within the maritime sector. With only limited possibilities to bypass the dangerous waters zone, piracy is currently a direct threat to any industry using the Arabian Gulf as a transport route for imports and exports. Providing alternative, safe transport route, interconnected with export points throughout the South of the Arabian Gulf, the Arab Sea and the Red Sea, is a potent weapon against potential future instability at strategic supply chain maritime transport routes, affected by the threat of piracy. Each of the GCC governments has launched various rail projects, currently worth over $100 billion. Saudi Arabia and the UAE have taken the furthest strides to date. IN Saudi Arabia, Saudi Arabia, well under way is the North-South Railway (NSR) project, the world’s largest railway construction and the longest route to adopt the European train control system (ETCS) to date. Trial operation began on the 2,400 km passenger and freight line, which runs from Riyadh to Al Haditha near the border with Jordan, in May 2011. Today the line transports phosphates from Jalamid to Ras-Al-Khair.

Etihad Rail AbuDhabi trains running from Habshan to Ruwais – 150 Km




UAE Plans To Boost Its Gas Import Capacity – Energy Minister Reuters +NewBase

The United Arab Emirates plans to increase its gas import capacity and sees a fall in liquefied natural gas (LNG) prices as an incentive for many countries to diversify their gas supplies, the country’s energy minister said on Wednesday.

“In the future we will be increasing the amount of LNG or the capacity to import. This is to provide flexibility for power

generation,” Suhail bin Mohammed al-Mazroui told reporters on the sidelines of an energy event.

“We have seen a significant drop in the LNG gas prices … All of these things are encouraging many countries to consider LNG as part of their diversified gas sources.”

He said there are plans to upgrade Dubai’s floating LNG regasification import facility at Jebel Ali port “to cater for more LNG imports … definitely it is an upgrade from the existing three million tonnes (a year)”. He gave no further details on the capacity increase or timeline.

LNG is natural gas cooled to liquid form so it can be loaded on special tankers. The liquid is then delivered to receiving terminals where it is regasified and pumped into onshore pipelines.

The UAE is building an LNG import facility at the busy oil port of Fujairah, known as EmiratesLNG, with a capacity of nine million tonnes a year. The country gets a modest volume of Qatari gas through the Dolphin pipeline, which helps feed power and desalination plants at Fujairah.

The UAE is moving ahead with adding more capacity to the Dolphin pipeline and is developing its own gas resources such as the Shah and Bab sour gas fields, Mazroui said.

The Shah project, which began operations this year, will achieve full production in the second quarter.

“We are building the capacity from within and we are also increasing what we should have from the outside, foreign gas coming to the system, whether it’s pipeline gas or whether it is LNG,” Mazroui said, adding that the global fall in oil prices had no impact on these strategies.

“The plans that we put are realistic, they are doable. We have not seen any risk on missing these targets,” he said.




India's Reliance Signs PSCs for Two Myanmar Offshore Blocks RIL + NewBase

India’s Reliance Industries Ltd (RIL) and state owned Myanma Oil & Gas Enterprise (MOGE) have signed production sharing contracts for two offshore blocks (M17 and M18).

RIL won both the offshore blocks after its bids in Myanmar Offshore Block Bidding Round – 2013 were declared successful by Myanmar’s Ministry of Energy (MOE), Reliance said in a statement Tuesday.

RIL will be the operator of the blocks with a 96 per cent participating interest. United National Resources Development Services Co. Ltd. (UNRD), a Myanmar company, will hold the remaining interest in the block. Both the blocks are located offshore in the Tanintharyi basin of Myanmar in water depths upto 3000 ft. and spread over an area of 27,600 sq. kms.




UK 2014 LNG imports rise – 20.7% higher LNG World + NewBase

The UK’s 2014 LNG imports were 20.7 percent higher, whereas pipeline imports were 19.2 percent lower as compared to the year before.

The increase in LNG imports in 2014 was driven by a sharp fall in the price of the chilled gas,

particularly during Q3 2014, according to data by the Department of Energy & Climate Change

(DECC).

Total gas imports were lower by 10.8 percent in 2014, whilst net imports were 18.0 percent lower than 2013. LNG imports accounted for 26.6 percent of total imports in 2014, compared with around a fifth in 2013.

In 2014, gas demand fell by 9.2 per cent. A large component of that was the decrease in domestic use (down 16.7 per cent) reflecting significantly warmer temperatures during 2014, DECC said.

There was a 1.5 percent increase in gas used for electricity generation reflecting a decrease in coal generation and lower wholesale gas prices.




US: Greenpeace criticises US approval of Shell’s Arctic drilling lease Greenpeace+NewBase

Greenpeace, a non-governmental environmental organisation, has criticised the US Department of Interior’s approval of Shell Oil’s Chukchi Sea drilling lease in the Artic Ocean.

Climate change is melting the Arctic sea ice at an alarming rate, and right now the Arctic is experiencing the lowest sea ice maximum ever recorded, said a statement. Ian Duff, Greenpeace Arctic campaigner, said: “It’s an indefensible decision. The Arctic is melting rapidly because of climate change.” “All the evidence shows Shell can’t drill safely in the Arctic. The extreme conditions means it’s when, not if, a spill will happen,” he said. “This decision puts (US President) Obama in an untenable position. Obama’s got to show leadership on climate in the run up to Paris, but this is a massive blow to US credibility. The Arctic has become the iconic battleground for the global climate movement, so we can expect to see a huge reaction against this in the US and across the globe,” he added. The extreme Arctic conditions, including giant floating ice-bergs and stormy seas, make offshore drilling extremely risky. The US administration itself acknowledged a 75 per cent chance of a large oil spill over the lifetime of the wells. And scientists say that in the Arctic, an oil spill would be impossible to clean up meaning devastation for the Arctic’s unique wildlife, it further stated.




U.S. DOI opens doors for Arctic drilling Offshore World + NewBase

The U.S. Department of the Interior yesterday issued a Record of Decision affirming Chukchi Sea OCS Oil and Gas Lease Sale 193 and the remaining oil and gas leases issued in 2008 as a result of the sale.

“The Arctic is an important component of the Administration’s national energy strategy, and we remain committed to taking a thoughtful and balanced approach to oil and gas leasing and exploration offshore Alaska,” said Interior Secretary Sally Jewell. “This unique, sensitive and often challenging environment requires effective oversight to ensure all activities are conducted safely and responsibly.”

Upon issuance of the Record of Decision, Bureau of Ocean Energy Management BOEM may begin formal review of a company’s exploration plan for the Chukchi Sea, which includes public engagement and additional environmental analyses. BOEM, BSEE and other Federal agencies will need to review and approve activities before any exploration activity can occur, DOI said in a statement.

Legal challenges

The original Environmental Impact Statement (EIS) for Lease Sale 193 was published in 2007 but subsequent legal challenges and Federal court decisions remanded the lease sale back to the Bureau of Ocean Energy Management (BOEM) for further analysis. The most recent court




decision, from the U.S. Court of Appeals for the Ninth Circuit, specifically addressed BOEM’s estimates of production levels from OCS oil fields that might be discovered in the Chukchi Sea.

In response to the court remand, BOEM conducted additional analysis to estimate the highest amount of production that could reasonably result from Lease Sale 193 and incorporated that information into a Supplemental EIS (SEIS) that was published in February 2015. The Department issued yesterday’s decision after studying the information compiled in the SEIS and analyzing all comments received.

“Working closely with our partner agencies at the Federal, state and local levels, our analysts brought to bear the best science available to produce a careful and robust analysis,” said Janice Schneider, Department of the Interior Assistant Secretary for Land and Minerals Management, who signed the Record of Decision.

Upon the Ninth Circuit court remand in January 2014, the Bureau of Safety and Environmental Enforcement suspended all leases issued via Lease Sale 193. With today’s decision these suspensions are lifted.

“I am very grateful for the work that BOEM professionals put into this extensive analysis, and for the input we received from our stakeholders throughout the entire process,” said BOEM Director Abigail Ross Hopper.

Environmentalists slam the decision

Earth Justice, a non-profit public interest law organization based in the United States dedicated to environmental issues, has slammed the decision, saying the DOI acted in haste, catering to “Shell Oil’s desire to drill as early as this summer.”

“Interior should not compound today’s misstep by rushing to approve Shell’s plans to drill this summer, which can only now be formally reviewed by the department. Shell’s planned drilling is even bigger, dirtier, and louder than in 2012, calling for more sound disturbances and harassment of whales and seals, than the company’s previous plans and does not address adequately the company’s failed efforts to drill in 2012. Interior should take additional time to evaluate Shell’s drilling plans,” the organization said in a statement.

“We are disappointed in Interior’s rushed lease sale decision,” said Erik Grafe, Earthjustice staff attorney. “Interior still has time to make a better decision when evaluating Shell’s drilling plan, and we sincerely hope it says no to Shell’s louder, bigger, and dirtier tactics, loaded with potential environmental harm. The region is suffering dramatically under climate stress, and drilling will only further stress the region’s wildlife and people and ultimately worsen climate change. The Arctic Ocean’s fossil fuels must remain in the ground if we are to avoid the worst effects of climate change.”




Mexico: Oil platform on fire. 4 dead, 300 evacuated News Agencies

A fire broke out Wednesday on a Pemex-operated oil platform in the Bay of Campeche in Mexico. According to Pemex, one worker died while 300 were evacuated to nearby platforms, after the Abkatun Alpha platform caught fire.

The national oil company said the fire broke out in the dewatering and pumping area of the platform, without specifying what the cause might have been more than 16 wprkers were officially reported injured, two of them are in serious condition.

According to various internet reports however, the number of injured stands at 45. The worker that tragically died was a contractor for a Mexican oil services

company Cotemar.Pemex said that it was battling the fire with eight firefighting boats.

The production platform is a part of the Abkatún-Pol-Chuc complex, located in the Campeche basin, between the states of Campeche and Tabasco, and approximately 132km northeast from the Port of Dos Bocas maritime terminal. The field started production in 1980.

Eight firefighting boats were battling the flames, Pemex said, adding that one of the fatalities was from their company, another was a contractor for Mexican oil services firm Cotemar and two others have yet to be identified.

Videos posted on Twitter showed the offshore platform engulfed in flames, lighting up the night sky, as rescue workers looked on from nearby ships. The fire broke out in the dehydration and pumping area of the platform, Pemex said, though it was not yet clear what caused it. There was no oil spill, a company spokesman said.

Authorities gave differing estimates on the number injured in the fire. Pemex said 16

people were hurt, two of them seriously. A spokesman for emergency services in nearby Ciudad del Carmen said on Wednesday morning that 45 people had been admitted with injuries.




Oil Price Drop Special Coverage

Oil prices retreat over Iran talks pressure Reuters + NewBase Oil prices fell on today Thursday as attention returned to nuclear talks with Iran, with the prospects for a deal and an increase in Iranian crude exports helping to keep pressure on prices. Both Brent and US crude prices snapped three-session losing streaks on Wednesday, gaining $2 or more after data from the Energy Information Administration (EIA) showed a fall in rigs drilling for oil resulted in a drop in US output last week for the first time since late-December. Brent crude for May delivery was down 37 cents at $56.73 a barrel by 0408 GMT. The contract had settled $1.99 higher on Wednesday. US crude for May delivery was down 50 cents at $49.59 a barrel, after closing up $2.49, or 5.2 percent. "(I expect) nothing beyond a general statement of intentions to keep talks going through spring," professor Scott Lucas of EA World View, a specialist website on Iran and Syria, told Reuters Global Oil Forum. Despite US production falling for the first time since late December, crude inventories still rose last week to a record high for the 12th straight week. "Slower growth in inventories is signalling that production is finally catching up to the recent decline in the US rig count," analysts at ANZ said in a note. The EIA pegged the US crude stock build last week at 4.8 million barrels, while analysts polled by Reuters had expected a 4.2-million-barrel build on average. Oil prices were also supported on Wednesday as the dollar was pulled lower by fresh signs that US economic growth slowed in the first quarter. Commodities denominated in dollars, such as oil, become more attractive to holders of other currencies when the greenback weakens.




First Saudi Sovereign Debt Since ’07 Seen This Year as Oil Bites Bloomberg + NewBase Saudi Arabia may issue sovereign debt for the first time since 2007 this year after oil’s decline sent its cash reserves plunging, according to Ashmore Group Plc.

Assets of the biggest Arab economy’s central bank tumbled by 76 billion riyals ($20 billion) in February, the largest monthly drop since at least 2000. The country has a debt-to-GDP ratio of about 2.6 percent, according to International Monetary Fund estimates, among the lowest in the

world, and may now take advantage of record low interest rates and ample bank liquidity, said John Sfakianakis, a Riyadh-based director at Ashmore and former chief economic adviser to Saudi’s Ministry of Finance.

“If oil prices remain at $55 to $60 a barrel, I would expect them to

issue some debt in the second half,” Sfakianakis said by phone March 31. “They will tap the local debt market through medium-term paper, which would be a balanced fiscal approach, to partly use reserves and partly the debt markets.”

The world’s biggest oil exporter hasn’t issued debt with a maturity of more than 12 months for eight years, choosing instead to run down reserves when necessary to fund expenditure. Saudi Arabia has vowed to maintain spending on its major projects, including railroads, power stations, desalination plants and universities, even after oil prices dropped by half in the past nine months.

‘Draw on Savings’

The kingdom will borrow and rely on its reserves while continuing its spending plans, state-run Saudi Press Agency cited Economy Minister Mohammad Al-Jasser as saying Dec. 25. Money from the hydrocarbons industry contributes about 90 percent of government revenue in the country, according to a Standard & Poor’s report in June.

Brent crude, a benchmark for half of the world’s oil, traded at about $55 a barrel yesterday from $115 a barrel in June.

While there “was a sharp drawdown” of reserves in February, Saudi Arabia still has substantial savings, James Reeve, the London-based deputy chief economist at Samba Financial Group, the kingdom’s third-biggest bank, said by e-mail March 31. “They can continue to draw on savings to finance their position well past 2020 and we don’t think they will issue debt just for the sake of it.”

Foreign assets at the Saudi Arabia Monetary Agency were 2.65 trillion riyals at the end of February, according to data compiled by Bloomberg.




Ample Cash

The kingdom forecast revenue to drop more than 30 percent in 2015 to 715 billion riyals, while expenditure was set at 860 billion riyals, according to a Finance Ministry statement Dec. 25. Spending in 2014 is estimated to have been 1.1 trillion riyals, 29 percent higher than targeted, it said. Economic growth in 2015 will probably slow to 2.5 percent from an estimated 4.6 percent last year, according to the median forecasts of 15 economist estimates compiled by Bloomberg.

Saudi Arabian banks have ample cash to lend, with their combined loans-to-deposit ratio at 86 percent at the end of February, according to data from the central bank. Lending to the private sector grew 11.6 percent in the 12 months through February and dropped 2 percent to the public sector.

The government “might issue some debt because the percentage of sovereign debt to GDP is one of the lowest globally,” Mazen Al-Sudairi, the head of sell-side research at Alistithmar Capital, a unit of The Saudi Investment Bank, said by phone from Riyadh on March 31. “If they’re sure interest rates will remain low for a long period they might issue right now.”




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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 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 02 April 2015 K. Al Awadi







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New base 574 special 02 april 2015