Microsoft word new base 997 special 07 february 2017 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,

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NewBase 07 February 2017 - Issue No. 997 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: SEWA, India’s Larsen & Toubro discuss co-operation

(WAM) -- Dr. Rashid Al Leem, Chairman of Sharjah Electricity and Water Authority, SEWA, met on Monday a delegation from India’s Larsen & Toubro and discussed co-operation between the two parties in project development.

Al Leem and Praveen Gopal, Sales Manager at Larsen & Toubro, who also led the delegation, discussed the major strategic plans of SEWA for 2020 and also talked about future projects.

The SEWA Chairman stressed that the organisation, upon the directives of H.H. Sheikh Dr. Sultan bin Mohammed Al Qasimi, Supreme Council Member and Ruler of Sharjah, seeks to build strategic partnerships with international agencies, companies and research centres to implement projects in order to develop networks, production and distribution centres for energy and water as per best international standards.

Al Leem also noted that the SEWA started implementing a number of projects to raise the efficiency of plants by 50 percent and reduce network wastage. It also seeks to implement a number of developmental projects, he added.

He said that the SEWA would complete two distribution stations with 132 kV and 10 other distribution stations with 33 kV, change cables and modify networks more than 30 years old in order to ensure consistency and stability, and provide better services to the people of the Emirate of Sharjah, with a view to achieving sustainable development.

The Larsen & Toubro delegation head hailed the vision of the Sharjah Ruler, citing the growth and development in various fields in the emirate.

He also noted the rapid development of SEWA, a strong motivation to co-operate with it in various fields such as technology, engineering, construction and infrastructure development in a bid to further contribute to its growth and development.




Egypt signs $1bn contract with Russia, France & Oman to import LNG Reuters

As Egypt struggles with liquefied natural gas (LNG) shortages after the 2011 revolution, the country has signed a $1 billion import contract with Russia's Rosneft, France's Engie and Oman's OTI.

Local natural gas company EGAS will buy 45 shipments from the multinationals, Egyptian media Al-Ahram reports. The shipments will range from 138,000 to 156,000 cubic meters of LNG, and Egypt will have six months to pay for the purchases, said Oil Minister Tarek El-Molla.

The minister added the country would get a significant discount "in recognition and appreciation of Egypt and the president's [Abdel Sisi] role regionally and internationally."

Before the 2011 revolution, Egypt produced enough LNG to cover its needs and also export to Israel and Jordan. However, after the upheaval LNG exports fell by nearly 75 percent, according to the US Energy Information Administration.

While the country was forced to slash oil and gas exploration work, the demand for LNG has steadily grown. Egypt plans to reduce gas imports in the next two years, as it rebuilds infrastructure.

In December 2016, Rosneft CEO Igor Sechin visited Egypt and said the Russian energy firm and EGAS are interested in extending cooperation in LNG deliveries.




Ghana: John Agyekum Kufuor FPSO vessel ready to set sail to Offshore Cape Three Points, Ghana..Source: Eni

Eni announced Friday that the naming ceremony of the 'John Agyekum Kufuor' floating production, storage and offloading (FPSO) vessel was held in Singapore. The FPSO will operate in the Sankofa-Gye Nyame field in the Tano Basin, in Ghana’s offshore, for the Offshore Cape Three Points (OCTP) project.

The vessel, named after Ghana’s Former President Kufuor, who was present at the naming ceremony along with Ghana’s First Lady Mrs. Rebecca Akufo-Addo, is expected to arrive in Ghana by April 2017.

John Agyekum Kufuor FPSO (Source: Vitol)

The FPSO has an oil treatment capacity of 58,000 barrels per day (bbls/d) and a gas treatment capacity of up to 210 million standard cubic feet per day (mmscf/d). Additional facilities include a water injection module of up to 55,000 bbls/d and gas injection facilities of up to 150 mmscf/d. A total number of 18 subsea wells will be connected to the FPSO meanwhile a 63km pipeline to shore will provide domestic gas supply to Ghana’s thermal power plants for more than 15 years, a significant contribution for the country’s energy needs and economic development.

Eni is the OCTP block’s operator with a 44.44% stake. The other partners are Vitol with 35.56% and GNPC with 20%. Eni has been present in Ghana since 2009, where it operates through its subsidiary Eni Ghana. Besides the OCTP license, Eni operates the Cape Three Points Block 4 exploration license.




Tanzania: Aminex announces Ntorya-2 well result ahead of expectations…Source: Aminex

Aminex has announced that the Ntorya-2 appraisal well has been successfully drilled to a depth of approx. 2,750 metres. At 2,596 metres drilling depth the well encountered a gross gas bearing reservoir unit of approx. 51 metres. Preliminary petrophysical analysis of the Logging While Drilling (LWD) logs indicates a porous and hydrocarbon bearing reservoir with a potential net pay of between 25 and 30 metres. Drilling of the reservoir section was associated with significant gas

influxes and higher than expected pressures. The result is well ahead of the Company’s pre-drill expectations.

The well is currently being deepened to a total depth of approximately 2,780 metres, prior to a wireline logging programme being run, to allow for the setting of a 7-inch liner below the reservoir interval. Detailed petrophysical analysis will be conducted on both the LWD and wireline logs. Preparations are currently underway for a comprehensive well testing programme and the Company expects to have results of the

flow-testing and ongoing petrophysical analysis by late February.

Ntorya-2 also encountered traces of oil in the gross reservoir interval and the Company is now evaluating the implications of this positive development through an updated basin model. The well was spudded in the onshore Ruvuma Basin of Tanzania (Mtwara Licence: Aminex 75% and operator) on 21 December 2016 in order to appraise further the Ntorya Appraisal Area. Ntorya-1 had a net pay of 3.5 metres and flow-tested at 20 million cubic feet per day, with 139 barrels of associated condensate. The Ntorya field is approx. 40 kms from the Madimba gas processing plant, which receives gas into the National Gas Pipeline system.

Depending on the results of the well test, the Company intends to apply for a 25-year development licence over the Ntorya Appraisal Area.

Jay Bhattacherjee, CEO of Aminex said:

'We are delighted with the progress of the Ntorya-2 appraisal well, which is ahead of our expectations. The reservoir is both thick and high quality. Aminex looks forward to providing the results of the flowtesting which will enable the joint venture to consider its options for development of the Ntorya field.'




The world’s largest nuclear plants differ by age, number of reactors, and utilization.. U.S. EIA

There are currently 449 operating nuclear reactors in 31 countries, with a total installed generating capacity of more than 390,000 megawatts (MW), based on data from the International Atomic Energy Agency. Nuclear power plants differ in various ways including reactor types, vessel containments, cooling methods, and dispatch purposes.

The largest nuclear plant in the United States, the Palo Verde plant near Phoenix, Arizona, ranks as the ninth-largest operating nuclear plant in the world and has the highest capacity factor among large nuclear plants.

The list of the largest nuclear plants has changed in recent years. Three plants in Japan, each with a generating capacity of more than 4,000 MW, were suspended from operation following the accident at Fukushima Daiichi and, like nearly all of Japan’s existing nuclear plants, are not currently generating electricity.

Other countries, especially China, are adding large nuclear plants. For instance, the Hongyanhe plant near Dalian, China, had a capacity of 3,183 MW at the end of 2015 but, with the startup of another 1,000 MW reactor in 2016, the plant's capacity now totals 4,183 MW, with another two reactors under construction.

With the idling of Japan’s 7,965 MW Kashiwazaki-Kariwa plant, the Bruce Nuclear Generating Station, located on Lake Huron in Ontario, Canada, is currently the world’s largest operating




nuclear power plant. Bruce has eight reactors, configured as two separate facilities operating four reactor units each, and has a combined installed capacity of 6,274 MW.

Of the top ten operating nuclear plants in the world, the United States’ Palo Verde plant has the fewest number of reactors (three) but has the highest capacity factor, a measure of plant utilization. Plants that operate more have higher capacity factors and produce more electricity per unit of generating capacity. Based on the most recent five years of data (2011–15), Palo Verde’s capacity factor averaged 92%, while other large nuclear plants’ capacity factors ranged from 73% to 88%.

Source: U.S. Energy Information Administration, based on data from International Atomic Energy Agency Power Reactor Information System

Over the past 15 years, nuclear capacity factors in the United States have typically remained above 90%, which is higher than nuclear plants in other regions of the world. The duration of refueling and maintenance outages is a significant factor in why U.S. capacity factors are so high.

Nuclear reactors undergo routine maintenance and refueling outages about once every 18 to 24 months. Although a nuclear reactor can be refueled in as little as 10 days, outages often last longer, as operators conduct other noncritical maintenance work simultaneously to minimize overall operational downtime.

In the United States, the average duration of refueling outages has been steadily declining. In the early 1990s, refueling-related outages lasted nearly three months. In spring 2016, refueling outages in the United States averaged 29 days. Using data from the Nuclear Regulatory Commission, EIA maintains a tool displaying the daily operating status of each nuclear plant in the United State




NewBase 07 February 2017 Khaled Al Awadi

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

Oil falls as U.S. supplies, speculative length counter OPEC cuts Reuters + NewBase

Brent futures fell $1.09, or 1.9 percent, to settle at $55.72 a barrel, while U.S. West Texas Intermediate crude lost 82 cents, or 1.5 percent, to close at $53.01. That was the lowest close for both contracts since Jan. 31.

The Brent premium over WTI narrowed to $2.09 a barrel at the close, its smallest since Jan. 19. "We feel that the bulk of the price decline related to the larger-than-expected increase in net WTI speculative length as well as another hefty increase in the (U.S.) oil rig count," Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note. Ritterbusch and others also said the crude decline was associated with weakness in gasoline futures. U.S. gasoline futures fell 2.8 percent on Monday. Hedge funds and other speculators boosted their bullish bets in U.S. crude futures and options in the week to Jan. 31 to the highest level on record, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. "There are a lot of longs in the market, and if we don’t see prices rise those longs will get discouraged and exit the market as fast as they entered over the past few weeks," said Tariq Zahir, trader at Tyche Capital Advisors in New York. Oil prices, while supported by the Organization of the Petroleum Exporting Countries' (OPEC) supply cuts since the start of the year and a new spike in tension between Iran and the United States, are struggling for new direction. The Trump administration's new sanctions against Iran, though not affecting oil output, raised concern about the potential for further developments that could hinder export growth in OPEC's third-largest producer.

Oil price special

coverage




NewBase Special Coverage

News Agencies News Release 07 Feb. 2017

Investors Have Never Loved OPEC So Much as It Sticks to Cuts by Jessica Summers

Money managers are the most bullish ever on West Texas Intermediate crude for a second week as signs show OPEC and other nations are slashing production. The group cut supply by 840,000 barrels a day last month, according to a Bloomberg survey, and Russia, the largest of the non-members taking part in the deal, reduced output by 117,000 barrels a day. WTI has traded above $50 a barrel for the past seven weeks, encouraging Wall Street investors to fund more drilling in U.S. shale fields. “The smart money is starting to realize that the OPEC production cuts are real,” Phil Flynn, senior market analyst at Price Futures Group in Chicago, said by telephone on Friday. “The oil story is beginning to look like the bust-end of the cycle is over.”

Crude has risen 19 percent since the Organization of Petroleum Exporting Countries agreed in late November to cut output in an effort to reduce a global glut. With global demand growth outstripping supply gains elsewhere in the world, OPEC’s cuts may reduce stockpiles by as much as 2 million barrels a day this year, Andrew Hall, founder of hedge fund Astenbeck Capital Management LLC, said in an investor letter. Hedge funds increased their net-long position, or the difference between bets on a price increase and wagers on a decline, by 2.4 percent to 379,927 in the week ended Jan. 31, the highest level




in data going back to 2006, U.S. Commodity Futures Trading Commission data show. WTI slipped 0.7 percent to $52.81 a barrel during the report week. On Monday, prices were 0.2 percent higher at $53.96 a barrel as of 12:34 p.m. in London. January output reductions were led by Saudi Arabia, OPEC’s largest producer, which trimmed output by half a million barrels a day. Russia’s reduction was “more than twice as high as the initial plans of the companies,” Energy Minister Alexander Novak said. A possible U.S. border tax in some form may also provide a boost to prices and drilling. The potential tax may lead to WTI rising 25 percent, said Ebele Kemery, portfolio manager and head of energy investing at JPMorgan Asset Management. U.S. Inventories

Still, OPEC’s total output remains 550,000 barrels a day above the target set out in their deal. U.S. crude inventories keep growing, as Energy Information Administration data showed stockpiles rose to the highest level since August. Hall said that the OPEC cuts won’t be reflected in U.S. inventories until this month, because of a surge of Middle East supply before the deal, and the time it takes for tankers to reach the U.S. The rally has encouraged U.S. shale producers to grow faster, which may help keep prices capped around $55 a barrel as companies hedge their output. Producers and merchants increased their short positions, or bets on falling prices, to 703,259 contracts, CFTC data show. Diamondback Energy Inc. plans to double its capital spending this year and Continental Resources Inc. will spend 77 percent more. Wall Street is eager to join in. Energy companies in the U.S. raised $6.64 billion from equity sales in January, the biggest haul for the beginning of a year since at least 2000, data compiled by Bloomberg show. Drillers have increased the number of rigs seeking oil by 84 percent since May, according to Baker Hughes Inc. The market is “closely monitoring the compliance of the countries involved with the OPEC, non-OPEC production deal,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by telephone on Friday. “Early signs have been somewhat decent, so the market continues to reward their efforts. The positioning is a bit extreme. It could be a cautionary tale that the run may be nearing its end at the same time.”




Opec implements cuts as US inventories grow The national - John Sfakianakis

Oil registered a third weekly gain as the US imposed fresh sanctions on Iran after a missile test and Opec reached about 60 per cent, or 840,000 barrels per day, of its output-cut target, according to a Bloomberg survey.

Opec and other exporters agreed last year to reduce supplies by a combined 1.8 million bpd to prop up prices that remain at about half their mid-2014 levels.

After posting the biggest annual gain in seven years in 2016, oil has fluctuated in the mid-US$50s as Opec implements cuts. Oil producers from Saudi Arabia to Venezuela have implemented cuts and Russia says it is ahead of schedule with its own reduction. However, rising output from those not included in the accord – Libya, Nigeria and Iran – and from the US might undermine the effectiveness of the deal.

US crude inventories rose last week by 6.5 million barrels to 494.76 million barrels, the Energy Information Administration said, far exceeding forecasts for an increase of 3.3 million barrels.

Saudi Arabia has cut output by even more than it pledged. Some analysts expressed doubts that Iraq would deliver its share of the cuts, potentially undermining the drive to rebalance the market and drain inventories stuffed by two years of unconstrained production that helped to crash prices. Rising supply from the three countries excused from the agreement could offset the cuts made by the rest, reducing the size of the overall reduction in Opec output to little more than 800,000 bpd. This remains to be seen.




Thus far Saudi Arabia has reduced output more than it was supposed to under the November agreement. Once domestic consumption begins its seasonal demand towards its summer peak, Saudi output will have to rise to maintain exports. Energy subsidies will later this year, once again, be reduced and consumption will begin to be affected, as it did, albeit marginally, in 2016. So Saudi Arabia is right, like all other Gulf oil producers, to reduce energy subsidies.

Crude inventories in the US, the world’s biggest oil consumer, have been near record highs for much of the past year and domestic production is rising as US companies drill for shale oil. Investors are also considering that US shale drillers are boosting activity and their break-even price looks competitive even with oil below $60 per barrel.

In a report by Wood MacKenzie, projections of break-even shale oil prices for the upper end of the wells in North America and the Gulf of Mexico is in the low $70s. Not too long ago, the break-even prices in shale basins were estimated to be above $80 per barrel or, for some, even $100.

The reality on the ground is more complicated, however, than simply the break-even price of shale. Transport costs can vary widely depending on where you’re drilling, where your refining customers are and whether the oil is being shipped by pipeline, railcar or truck.

As per industry practice, drillers in the Bakken have an average break-even price of $52 per barrel. Add on top another $5 for overhead and interest charges and assume the oil is being sent from North Dakota to refiners on the Gulf Coast by railway at $10 per barrel. The all-in break -even price for that barrel is $67. If there is space on a pipeline available, then that comes down to maybe the low $60s.

Take Dakota Access, for example. If Donald Trump’s signature clears the final barrier to completion, then the pipeline could be up and running later this year. Assuming 90 per cent utilisation, it could carry 450,000 bpd from the Bakken shale basin towards refineries on the Texas coast, according to Wood Mackenzie. Bakken output has been falling since December 2014 as E&P companies have shifted focus to lower-cost regions such as the Permian basin in Texas.

The confluence of more pipes and better overall infrastructure for transporting oil as well as a new tax policy in the US will increase oil output to almost double by 2018, according to Goldman Sachs. Moreover, higher oil production will lead to extra gas, which will also affect prices.

Opec’s room to manoeuvre and provide additional cuts will be put to the test. It takes a short time to develop shale resources, relative to conventional oilfields, and the E&P’s access to funding is important for the next round of fighting over market share and pricing.

Clayton Williams Energy is a case in point, with its resort to private equity and now a cash-and-stock acquisition taking its share price from $7 to $140 in the space of less than a year. Clayton Williams Energy is a Texas oil producer and an early user of horizontal drilling, which would later enable hydraulic fracturing, or fracking.

For the oil-producing countries of the Gulf, the adjustment from lower oil revenues is taking place, for some more abruptly than others. However, the fiscal adjustment should neither be too harsh nor too quick, as reiterated in previous editorials.

Although an economy is not akin to a company it is in some ways akin to a family’s household, at least on the expenditure side. In more difficult times it has to cut down its spending but not to the extent of jeopardising its livelihood. Excess spending, however, can always be reduced. And a family is part of a larger system that entices the economy to grow or contract. Gulf economies will have to continue to adjust to lower oil revenues as the battle ensues.




Oil's Promised Land Slips Away on OPEC Leaks By Julian Lee

It's just one month into OPEC's deal to cut production, and this could be as good as it gets for the group's attempt to rebalance the market. Rising output from those not included in the accord and from the U.S. is already undermining the effectiveness of the deal. The prospect for this leakage to worsen means we may now be seeing the beginning of the end of the march upward in prices.

When 10 OPEC members agreed on Nov. 30 to cut their combined output by around 1.2 million barrels a day, that target included an exception for Libya, Nigeria and Iran.

So far those ten countries have mostly taken much bigger steps towards meeting their obligations than most analysts thought possible. Saudi Arabia has cut output by even more than it pledged -- perhaps reflecting much lower domestic demand as gas supply increased and temperatures fell from summer highs. The outlier in this is Iraq, which has cut supply by only around a quarter of the amount it agreed to.

Walking the Walk

Most OPEC members have made big steps in implementing agreed output cuts

The effectiveness of these cuts in rebalancing the oil market is being undermined, though, both from within OPEC and outside. Rising supply from the three countries excused from the agreement is offsetting the cuts made by the rest, reducing the size of the overall reduction in OPEC output to little more than 800,000 barrels a day




In the coming months compliance from the ten countries bound by the deal might get a bit better than it was in January, but probably not by much. It is difficult to see Saudi Arabia being prepared to keep production below 10 million barrels a day -- once domestic consumption begins its seasonal climb towards its summer peak, output will have to rise in order to maintain exports, which is where they make their money. Iraq, already short of its target, is planning to raise exports from the south of the country this month to a near-record level.

Undermining OPEC's Action

Cut is reduced by partial implementation and rising output from Libya, Nigeria and Iran

NOTE: Output increases are measured from reported October production levels

If prices, which have already risen on the promise of cuts, stop increasing, producers may be less willing to toe the line in the coming months. History shows that, after an early burst of enthusiasm, compliance with OPEC output cuts typically wanes as time passes.

Add to this the prospect of further recovery in production from Libya and Nigeria and some small growth in Iran, and we may see total OPEC supply starting to creep back up.

That would probably undermine the willingness of the group's non-OPEC friends to fulfill their part of the bargain. Russian production fell by 117,000 barrels a day last month, putting it ahead of its own schedule to satisfy its agreement with OPEC, but that may not last if the group's compliance begins to slip.

An even bigger threat to market rebalancing is coming from outside the group. U.S. supply is rising rapidly and is already up more than 400,000 barrels a day since October, according to preliminary weekly data. That is not anywhere near as much as OPEC output has fallen over the same period, but it is still a work in progress.




Shale Gale 2.0

U.S. crude production may have risen by as much as 400,000 barrels a day since October

Monthly data for December and January are estimated based on average uplift from weekly figures over the last six months

While OPEC cuts diminish, the volume produced by the U.S. is likely to keep climbing -- and the pace is already faster than during the first shale gale of 2014-15. And that's before President Donald Trump acts on his America First Energy Plan, aimed at lowering energy costs and "freeing us from dependence on foreign oil."

That plan, whatever form it takes, is clearly intended to boost U.S. production even further. Will it be enough for rising U.S. output to entirely offset OPEC's output cut? Probably not, but the rebound in production from shale and from the Gulf of Mexico will continue to undermine OPEC's attempt to rebalance the oil market, making it difficult for prices to rise much beyond their current level.




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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 February 2017 K. Al Awadi




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Microsoft word new base 997 special 07 february 2017 energy news

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