NewBase 612 special 26 may 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, redistributed,

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NewBase 26 May 2015 - Issue No. 612 Khaled Al Awadi

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

QEWC, Mitsubishi to build Qatar’s biggest-ever power, water plant

The $3.2 billion plant at Umm Al Houl, will provide 2,520MW & 136.5 MGPD.

Reuters + NewBase …A consortium including Qatar Electricity and Water Co and Mitsubishi Corporation will build the biggest integrated power and water plant ever constructed in Qatar at a cost of $3.15 billion, a statement from QEWC said on Monday.

The plant at Umm Al Houl, 20 kms south of Doha, will provide 2,520 megawatts of electricity and 136.5 million gallons per day of water, with the first stage set to be finished in 2017 ahead of full operation in 2018. Once completed, the plant will boost Qatar’s production capacity of power and water to 11,000 MW and 535 million gallons per day respectively, according to the statement.

The $3.15 billion cost will be 85 per cent met by borrowing from local and international banks as well as export credit agencies, with the remainder coming from the sponsors of the project. QEWC’s contribution to the equity portion would be $252.6 million, the statement added.

Earlier, local newspaper Gulf Times quoted the president of Qatar General Electricity and Water Corporation (Kahramaa), Issa bin Hilal al-Kuwari, and Fahd al-Mohannadi, general manager of QEWC, as saying the project would help meet Qatar’s rapidly-growing demand for power and water.




Katsuya Nakanishi, general manager at Mitsubishi, was quoted as saying the consortium had signed a 25-year agreement with Kahramaa to purchase the power and water produced by the plant. QEWC will hold 60 per cent of the project, with Mitsubishi and Tokyo Electric Power Co (Tepco) holding 30 per cent, the two Japanese companies said on Monday.

Tepco, which is struggling financially as it tries to recover from the Fukushima nuclear disaster, will hold only a 1.5 per cent stake in the venture but may raise that to up to 33.3 per cent by the end of September, Mitsubishi and Tepco said. The remaining 10 per cent will be split equally between Qatar Foundation and Qatar Petroleum.




Oman National Energy Strategy to be completed within 2 months Oman observer + NewBase

The Sultanate’s Public Authority for Electricity and Water (PAEW) is close to wrapping up the formulation of a National Energy Strategy — a keenly awaited, landmark policy document that will serve as a blueprint for securing the country’s energy requirements over the next 25 years. The initiative, according to a key official of the Authority, will be finalised within the next two months and prepared for submission to the government for its consideration and approval. Khalil al Zidi, Senior Engineer — Renewable Energy, said the strategy will identify a mix of conventional and alternative energy resources to be harnessed, developed and sourced in order to cover Oman’s needs over the 2016 – 2040 timeframe.

“The scope of the National Energy Strategy is comprehensive, and not merely focused on the electricity sector,” Al Zidi said. “It also covers the needs of the transport sector, oil and gas industry and petrochemicals, among other sectors. All the important stakeholder entities are involved in the study, including the ministries of Finance, Oil and Gas, Commerce and Industry, and so on. It will recommend a mix of energy sources, their respective share in the energy mix, and so on, based on the suitability of the resource and how it is suited to the Omani economic model,” he explained. Significantly, renewables will also have a share in the energy mix outlined in the National Energy Strategy, according to the official. “The strategy will recommend a specific target for renewables as a share of the energy mix. There will be penetration targets identified initially up to the year 2025, paving the way for greater penetration (over the rest of the timeframe of the strategy.” Al Zidi made the comments during a presentation at an energy forum held in Muscat week.




Earlier, he listed a number of “challenges” that, he said, were impediments to the growth and development of renewables in the Sultanate. Aside from the high capital cost of renewable energy infrastructure in relation to conventional energy systems, the lack of “bankable data” was also a major constraint, he said. The official cited in this regard the absence of wind monitoring instruments that should ideally be placed at heights of around 80 metres above ground in order to collect “bankable data” crucial for the establishment of wind farms. Another principal hurdle, Al Zidi noted, was the absence of a policy framework on renewable energy development in the Sultanate. Likewise, generous subsidy — direct and indirect — enjoyed by consumers on conventionally produced electricity is a disincentive for renewable energy development, he added. Nevertheless, the PAEW continues to press ahead with initiatives designed to pave the way for the robust exploitation of renewable energy when these “challenges” are addressed, said Al Zidi. In collaboration with the International Renewable Energy Agency (IRENA), a specialised agency of the United Nations, the Authority undertook a comprehensive assessment of the renewable energy potential of the Sultanate. The study evaluated environmental and atmospheric conditions conducive for renewables, and identified actions necessary to overcome impediments to their deployment. It also underlined the importance of institutional and regulatory frameworks, resource mapping, R&D, and so on. The study underlined the potential for setting up an impressive 1.5 gigawatts of electricity generation capacity based on the installation of photo-voltaic (PV) systems atop homes across the Sultanate. Muscat Governorate’s share of this capacity is projected at 450 megawatts, he added.




UAE :REmap report findings 2030 highlight economic opportunities WAM + NewBase

REmap report 2030, issued by the International Renewable Energy Agency (IRENA), in cooperation with both Masdar and the Directorate of Energy and Climate Change at the Ministry of Foreign Affairs, has revealed that the pricing of solar energy in the UAE has become equivalent to the pricing of energy models based on oil and gas, a move that will give a momentum to shift towards solar energy in the UAE and impact economic feasibility and make the alternative energy commercially attractive.

The report added that the sun is the most important source of renewable energy in the UAE, pointing out that various forms of solar energy will account for 90 percent of renewable energy usage.

The Renewable Energy Map, REmap, presents the findings of the first study of

its kind dealing with potential of renewable energy at the national, regional and international levels.

Rapidly increasing natural gas prices and decreasing renewable energy costs are the main drivers for this shift. As recently as 2010, natural gas was available in the UAE at less than USD 2 per million British thermal units (MBtu).

Today, marginal import prices are in the range of USD 9-18/MBtu, even after accounting for the potentially

temporary price decline of late 2014 and early 2015. New domestic gas production is approaching USD 8/MBtu in cost and is insufficient to limit growing

import requirements. By contrast, local solar photovoltaic (PV) module prices have fallen around 75 percent since 2008.

A number of renewable energy technologies – such as solar PV, wind power, and waste-to-energy – are already proving economical in the UAE at above USD 8/MBtu, with solar PV potentially




competitive with gas prices as low as USD 4.5/ MBtu. There is a clear financial rationale for accelerated and greater deployment, surpassing the UAE’s existing targets in the power sector.

A 25 percent share of renewables in power generation by 2030 could be cheaper to achieve than the current targets. The most important enabling factor for renewable energy in the UAE will be the empowerment of government agencies to take holistic, comparative views of energy costs – and to act on these through regulation and/or tendering.

The report said the governance model in the Emirate of Dubai, and the creation of the UAE federal energy policy taskforce, are key local references. In November 2014, the results of a bid for a 100 MW solar PV plant in Dubai were released, setting a world-record low for cost at just US 5.98 cents per kWh and highlighting solar PV’s competitiveness in the Gulf region.

REmap 2030 represents IRENA’s assessment of how countries can work together to double the share of renewable energy in the global energy mix by 2030. It represents an unprecedented international effort that brings together the work of more than 90 national experts in nearly 60 countries. Following the global REmap report released in June 2014, IRENA is now releasing a series of country-specific reports built on the same detailed analysis.

It is a perfect example of the symbiotic relationship between IRENA and its member states, especially here in the Middle East. The report provides the objective, customised data needed to make smart energy choices.




Iran Increases Its Fuel Prices by 40% in a Bid to Boost Revenue Bloomberg + NewBase

Iran has raised fuel prices by 40 percent and scrapped an eight-year-old rationing program for private motorists as President Hassan Rouhani’s government seeks to shore up public finances.

Gas stations will sell regular fuel for 10,000 rials (36 U.S. cents), a liter, said Naser Sajadi, head of national Iranian Oil Products Distribution Co., according to Iranian state television. Under the plan that’s being discontinued, monthly consumption of up to 60 liters was at 7,000 rials a liter. The change will come into effect on Tuesday, Sajadi said.

Iran, an OPEC member, is scaling back a subsidy program that, along with international sanctions over the country’s nuclear program, has squeezed public finances. The decision to raise fuel prices will bring in about $1.8 billion in revenue in the Iranian year ending March 2016, said Saeed Laylaz, an economist and former adviser to ex-President Mohammad Khatami, downplaying its effect on inflation.

“This will create a better balance in the budget,” he said by phone from Tehran. “The government has succeeded in bringing the inflation to a third of what it was 20 months ago so there is no more unease” over inflation, he said.

Rouhani, who was elected last year, inherited one of the highest inflation rates in the Middle East as sanctions crippled the economy and pushed the

government’s budget into deficit. The International Monetary Fund estimates this year’s budget shortfall at 2.7 percent of economic output.

An interim nuclear accord with world powers, though, has helped stabilize the currency and reduce the annual inflation rate to about 14 percent in the month ending May 20.

Gasoline rationing was a legacy of former President Mahmoud Ahmadinejad, who introduced the plan in 2007 to cut consumption subsidized fuel and limit smuggling to neighboring countries. At the time, Iran spent some $5 billion a year to import gasoline.

Three years later, Ahmadinejad started phasing out food and energy subsidies, replacing them with monthly cash handouts to almost every Iranian. Rouhani’s government is attempting to restrict the handouts to the nation’s poorest by eliminating those deemed less needy.

In line with Monday’s decision, Iran will sell premium gasoline at 12,000 rials, gas oil at 3,000 rials and jet fuel to 6,000 rials per liter, Davoud Arab-Ali, a spokesman for National Iranian Oil Products Distribution Co. said, according to the oil ministry’s news website.




Egypt: Shell, Apache to Begin Shale Gas Production in Egypt Early Next Year

Royal Dutch Shell and Apache Corp are expected to commence shale gas production from the Apollonia field in the Western Desert in February 2016, according to Daily News Egypt.

Khalda Petroleum Co, which is undertaking operations on behalf of the two companies, will start drilling two experimental wells, data and pilot wells, in the Apollonia field. In December last year, Cairo signed its first shale gas exploration agreement with Apache and Shell.

Drilling operations will start at the first well by the end of this month, while the second one will be drilled directly after finishing the first well in June after studying and evaluating the core samples and well logs, reported Daily News Egypt.

The two companies will start drilling the horizontal wells in November. The first well will be drilled and completed and the same will take place for the second one by the next half of 2016.

According to the newspaper, construction works of surface facilities will start from September until December 2015, while the first well will be linked to the facilities by the beginning of January 2016.

Egypt has set $5.45 per million British thermal units (mmBtu) as the price for shale gas extracted by foreign firms.




Libyan power station shuts down for lack of fuel after tanker attack Reuters + NewBase A power station in a central Libyan city has shut down from lack of fuel, after war planes belonging to the country's official government bombed a tanker delivering supplies, officials of the state-owned power company said on Monday.

Air force commander Saqer al-Jouroshi said jets attacked the Libyan-registered tanker Anwaar Afriqyaying outside the port of Sirte on Sunday because it had been discharging weapons. But state oil firm NOC said the tanker had been bringing 30,000 tonnes of fuel to Sirte's power station.

A Reuters reporter filmed the tanker and visited the vicinity of the power station and saw no evidence of weapons being brought onshore. The ship had been anchored next to a fuel feeding installation. "The power plant of Sirte has shut

down due to a lack of gasoline operating the plant," said Ashraf al-Marimi, a spokesman for the state power firm, GECOL, in Tripoli. NOC, also based in Tripoli, said the attack would make it difficult to convince foreign shippers to dock at Libyan ports and would also increase insurance costs for cargoes. "This attack targeted directly ... the property of the Libyan people," NOC said in statement. NOC owns the tanker that was attacked. Shutting down the power station would worsen power cuts across Libya, it added.

The air strike is the third against oil tankers confirmed by the internationally recognised government based in eastern Libya. The attacks are part of a conflict between competing governments allied to armed factions, which are fighting for control four years after Muammar Gaddafi was ousted.

The power plant on the western outskirts of Sirte is controlled by forces loyal to the rival government in Tripoli. The rest of Sirte has fallen into the hands of Islamic State, who are exploiting the near-chaos in Libya.

The eastern government had already attacked a Greek-operated tanker docking at Derna in January, killing two seamen, and again accused the shipper of sending weapons. NOC had said the tanker was only carrying heavy fuel oil for a power plant.

Two weeks ago, forces loyal to the official government shelled a Turkish ship off the Libyan coast after it was warned not to approach. One crew member was killed in what Turkey described as a "contemptible attack".




Indonesia: Pacific Oil & Gas receives approval for Kisaran development Source: New Zealand Oil & Gas

JV partner New Zealand Oil & Gas reports that operatorPacific Oil & Gas has received ministerial approval for a Plan of Development of the Kisaran Production Sharing Contract in Sumatra, Indonesia, where New Zealand Oil & Gas has a 22.5 per cent interest.

Two wells were successfully drilled there, in the Parit Minyak Prospect, in 2013. A Plan of Development for the field was developed in 2014 and forwarded for government approval early this year. Ministerial approval extends the Production Sharing Contract until 2031.

The approved plan would see up to seven wells at Parit Minyak as the initial phase of development. A low cost development is anticipated, using both rented and permanent facilities and trucking the oil to nearby facilities. The joint venture expects to finalise an execution plan for the development before a final investment decision later this year.

New Zealand Oil & Gas has a 22.5 per cent stake in the joint venture through its subsidiary NZOG Asia. The Kisaran Joint Venture partners are Pacific Oil & Gas(55 per cent and Operator) and Pacific Oil & Gas (Sumatera), a subsidiary of Bukit Energy (22.5 per cent).




Fuel shortage shuts down Nigerian economy Bloomberg + The National + NewBase

A fuel crisis in Nigeria has grounded aeroplanes, shut banks and threatens businesses including the MTN Group, Africa’s biggest mobile-phone company, as fuel retailers halt distribution over a pay dispute with the government.

MTN, which has 61 million customers in Nigeria, said in a statement it is running low on fuel reserves and its phone network will be “significantly degraded” if it doesn’t receive supplies in 24 hours. Guaranty Trust Bank, Nigeria’s biggest lender, will close its offices from Monday because of the shortages, while Arik Air, the country’s biggest carrier, has cut two-thirds of its 120 daily flights.

Bharti Airtel’s local unit told its customers on Sunday to expect “some strain” on its services due to fuel difficulties, while Uber Technologies said its Lagos services are facing longer wait times due to non-availability of gasoline.

“Marketers are not loading products,” Isaac Aberare, secretary-general of the National Union of Petroleum and Natural Gas Workers of Nigeria, or Nupeng, whose members drive product tankers, said by phone from the commercial capital, Lagos.

Nigeria depends on fuel imports to meet more than 70 per cent of its domestic needs and pays importers to guarantee cheaper local prices. Majoroil marketing companies allege they are still owed 200 billion nairas, roughly US$1bn, in outstanding payments by the outgoing government of president Goodluck Jonathan.

“They are asking for a balance of 200bn nairas, 159bn of which is foreign exchange differentials,” Paul Nwabuikwu, spokesman for finance minister Ngozi Okonjo-Iweala said. The minister wants the claims verified “but the marketers are kicking against this and saying they must be paid or they won’t supply.”




Oil Price Drop Special Coverage

Oil prices steady but indications rally out of steam Reuters + NewBase

Crude oil prices were broadly unchanged in early trading on Tuesday, as firm demand supported and ample supply dragged, but analysts said there were signs that a recent rally was running out of steam.

Robust demand in Asia as well as due to the driving season in the United States is being met by near record output, especially from the Organization Of Petroleum Exporting Countries (OPEC), although U.S. production seems to have been peaked, at least temporarily.

Front-month Brent crude prices were up 6 cents to $65.58 per barrel by 0120 GMT. U.S. crude prices were up 16 cents at $59.88 a barrel.

Analysts said that big price spikes away from current levels were unlikely.

"Crude oil markets were supported by a reported decline in U.S. production and crude oil inventories last week but prices failed to re-test the highs set earlier in the month," ANZ bank said in a note on Tuesday.

London-based Timera Energy said that the recent oil rally had run out of steam because WTI prices were reaching levels at which producers could operate profitably.

The dollar hit a one-month high against a basket of major currencies on Tuesday after stronger-than-expected underlying U.S. inflation bolstered the Federal Reserve's case for an interest rate hike later this year. The rally followed a 7 percent fall between mid-March and mid-May.

Brent crude prices, by contrast, rallied more than 25 percent between March and mid-May but have moved largely sideways since.




ABOUT POWER-GEN MIDDLE EAST 2015 http://www.power-gen-middleeast.com/index.html#pgme_3

POWER-GEN Middle East, from 4-6 October 2015 in Abu Dhabi National Exhibition Centre (ADNEC) Abu Dhabi, UAE . POWER-GEN Middle East is a highly reputalble event providing up-to-date and comprehensive coverage about the power and water with local, regional and international representation, all under one roof .

World-Class Conference featuring presentations, case studies and panel discussions presented by over 150 eminent speakers and chairs representing more than 20 countries . Diverse Exhibition showcasing the latest innovative and cutting-edge products and equipment by leading regional and international companies .

• Renowned for providing up-to-date information about the latest technological developments in the power industry, POWER-GEN Middle East is a must attend event for professionals and decision makers in the power and affiliated desalination and industrial water/wastewater industries.

• This premier event not only provides the gateway to establishing a strong market presence in the region, but enables the chance to hear about exciting new developments as growth and vitality in the Middle East continues to soar in response to increasing demand and rapid industrial developments which has placed the Middle East region as one of the most dynamic power and water/wastewater sectors in the world.

• Attracting delegates and attendees from 69 countries across the Middle East and North Africa (MENA) region and around the world, this high-quality event is the industry’s leading platform to meet and network with senior executive and industry leaders.

• If you work in or supply products or services to the power generation or industrial water/wastewater industry in the Middle East and North Africa (MENA) region, then POWER-GEN Middle East is essential to reaching influential and major players.




• The MENA region is experiencing marked increases in energy and electricity demand associated with strong demographic growth, urbanization, expanding economy, and growing energy intensity, as well as high temperatures and scarce water

• The Middle East population is expected to grow by 31% by 2025 while GDP is predicted to rise by 4.3 percent by 2020. Such rapid population growth—especially in urban centres—paired with economic expansion and urbanisation, means greater demands are continuously being placed on the electric generation networks of the Middle East and North Africa (MENA)

• The event is critical to discussions about how GCC countries can meet the estimated 6 to 10 per cent annual surge in demand for power, which is around 8 GW of additional capacity, GCC countries are projected to invest more than $300 billion in some 20 energy projects by 2020

• Electricty demand in the Mena countries is set to grow at an average annual rate of 7 per cent per year, while it is estimated that as much as $283 billion will be invested within the MENA region’s power sector between 2014 and 2018

• The MENA region falls into the category of ‘physical water scarcity’ with water supplies depleting at one of the quickest rates in the world

• The GCC governments plan to allocate $300 billion to water and desalination projects by 202

EVENT OVERVIEW

QUICK EVENT STATS

• 3,200 attendees • 79 countries represented overall - 66% MENA, 19% Europe, 8% Australasia, 6% North

America, 1% Africa, 0.2% Latin America • 119 speakers & chairs from 20 countries • 106 exhibitors from 30 countries showcasing the very latest innovative and pioneering

design solutions and technologies • 20 conference sessions covering everything from planning UAE's power and water future

to developing MENA's changing fuel landscape and independent power & water projects along with fuel flexibility as well as improving plant and power system efficiency and plant technology case studies etc

CONFERENCE & EXHIBITOR ENQUIRIES

Conference & Speaker Enquiries:

Niki Antoniou

Conference Manager

T: +44 (0) 1992 656 630

E: [email protected]

Exhibitor & Sponsorship Enquiries: Feraye Gurel International Busines Development Director T: +90 5326 127717 E: [email protected]

Exhibitor Service Enquiries: Joanna Gillespie Exhibit Services Manager T: +44 (0) 1992 656 672 E: [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 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 26 May 2015 K. Al Awadi







Economy & Finance

NewBase 612 special 26 may 2015