New base 800 special 03 march 2016

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NewBase 03 March 2016 - Issue No. 800 Edited & Produced by: Khaled Al Awadi

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Oman: DIDIC confirms award of 3,219 MW power scheme to Mitsui-led consortium

Oman Observer

Dhofar International Development & Investment Holding Co SAOG (DIDIC) confirmed yesterday that a consortium in which it is a member has been awarded a contract to build the 3,219 MW Ibri-Sohar3 power project — the largest single-tendered Independent Power Project (IPP) in the Sultanate. In a filing to the Capital Market Authority, DIDC said: “We are pleased to announce that a consortium comprising Mitsui & Co Ltd of Japan, International Company for Water and Power (ACWA Power) and Dhofar International Development & Investment Holding Co SAOG (DIDIC) has been awarded the 3,219 MW Ibri Sohar3 power generation project.”

Both plants, it stated, will be owned and operated under a 15-year power purchase agreement with Oman Power and Water Procurement Company (OPWP). “This investment is part of our new strategic diversified investment plan and the management anticipates that this strategic investment will be of substantial benefit to DIDIC,” it added. Mitsui, as the lead investor with a 50.1 per cent shareholding and the managing member of the




Consortium, will help to meet that demand by newly constructing two natural gas-fired combined cycle power plants. Total investment in the IPPs, which together represent the single biggest procurement of electricity generation capacity by the state-owned power procurer and offtaker, is estimated at $2.3 billion. ACWA Power, with a 44.9 per cent stake, and DIDIC, with a 5 per cent shareholding, are investors in the two projects. As the selected developer, the consortium will construct, maintain and operate the two power plants in line with a series of project agreements due to be signed with various stakeholders next month.

At Ibri, the consortium is required to develop a 1,450MW generation capacity IPP at a site adjoining the Ibri Industrial Estate in Dhahirah Governorate. The Sohar-3 IPP – a 1,700MW plant – will come up within the Sohar Industrial Port. Commercial operation dates are January 2019 for Sohar-3 and April 2019 for Ibri.

Demand for electric power in Oman is increasing rapidly because of the economic growth driven by the oil and gas sector. Mitsui, as the lead investor with a 50.1% shareholding and the managing member of the Consortium, will help to meet that demand by newly constructing two natural gas-fired combined cycle power plants with a total capacity of 3,150MW.




Jordan: Acwa buys into solar power project in Jordan Bloomberg + The National

Acwa Power International, a Saudi Arabian renewable energy developer, acquired Sunrise Solar Energy, a project company that is building a 50-megawatt solar power plant in Jordan.

Sunrise Solar System Jordan, a subsidiary of Greek developer SunRise Photovoltaic Systems, sold the project after winning the tender to construct it last May by bidding 0.043 Jordanian dinar a kilowatt-hour.

The unit will be part of a 150-megawatt solar complex in the Mafraq development northeast of the capital city of Amman, Acwa said in a statement. It did not disclose the value of the transaction. Sunrise has signed a 20-year power purchase agreement with Jordan’s National Electric Power Company.

Germany’s ET Solutions will be providing engineering, procurement and construction services and Jordan’s Central Electricity Generation Company and First National Company for Operation and Maintenance Services, a subsidiary of Acwa, will operate and maintain the plant.

The government of Jordan has awarded power purchase agreements for 12 solar energy projects, seeking to install 200 megawatts.




Egypt: SacOil Achieves 1,000 Bopd Production Target at Lagia Oilfield by Rigzone Staff + SacOil

SacOil Holdings Limited announced Wednesday, on behalf of its subsidiary Mena International Petroleum Company Limited, that a production target of 1,000 barrels of oil per day has been achieved at the Lagia oil field in Sinai, onshore Egypt.

The production progress was achieved as part of Phase 2 of the field’s development program, which included the drilling of five new thermal wells. This development program was successfully completed under budget with no health or safety incidents reported, according to a SacOil statement. Commenting on the field development, SacOil CEO Thabo Kgogo said in a company statement:

"The completion of the Lagia phase 2 development program and reaching our target of 1,000 bopd are significant operational milestones for SacOil. We are pleased to have achieved our stated production target, which represents another step towards our strategic aim to become a leading pan African oil and gas company engaged in upstream, midstream and downstream activities.

“Our technical team has been pivotal in unlocking value at the Lagia oil field, particularly from the Thebes formation, which for the last 30 years has been explored and evaluated by a number of independent oil companies with very limited success. Our focus moving forward on Lagia will be to optimize production commensurate with the current low oil price environment and to further evaluate and appraise the discovery in the Thebes formation. Further updates will be announced in due course, as operations progress.”




Uganda Says Plans Oil Pipeline Through Tanzania Reuters|Elias Biryabarema

Uganda and Tanzania are planning to build a pipeline from Ugandan oil fields to the Tanzanian coast in a move that could strike a blow to Kenyan pipeline plans.

Statements issued after Ugandan President Yoweri Museveni and his Tanzanian counterpart John Magufuli met on Tuesday did not mention the fate of the Kenyan oil export pipeline plan. Uganda, which has yet to start oil production, raised the possibility of a Tanzanian pipeline route last year. France's Total, one of the oil firms developing Uganda's fields, had raised security concerns about the Kenyan route. A Kenyan pipeline could run near Somalia, from where militants have launched attacks on Kenya. But industry officials have

also said connecting Kenyan fields, which are also yet to start production, with those in Uganda would make the pipeline project cheaper as costs would be shared. "The two countries are planning to build an oil pipeline between Tanga (in Tanzania) and Uganda covering a distance of 1,120 km," the Ugandan presidency said in its statement. "Magufuli said this is projected to employ 15,000 people." Tanzania, which also has large offshore natural gas reserves, issued a similar statement. Uganda's Museveni has strong ties with Tanzania as he launched the rebellion that brought him to power in 1986 from Tanzanian soil. Uganda's statement quoted Magufuli saying that Uganda's decision was "reciprocating" Tanzania's past role. Museveni and Kenyan President Uhuru Kenyatta had made a joint call in August to implement a pipeline via Kenya's northern region "without further delay". But that statement was followed by other Ugandan comments saying the Tanzanian route was being explored as a possibility. Resolving the pipeline route is vital in helping oil firms involved in Uganda and Kenya make a final investment decision on developing oil fields. Production start dates have repeatedly been postponed, partly over pipeline considerations but also because of low oil prices. Other investors in Uganda include China's CNOOC and Britain's Tullow Oil. Tullow is also working in Kenya.




US: California wholesale gasoline price falls before switch to summer-grade gasoline

Source: U.S. EIA, based on Bloomberg

The spot price of wholesale gasoline in Los Angeles fell as low as 66 cents per gallon (¢/gal) on February 18, the lowest spot gasoline price in the nation and something that has only occurred on 24 days in the past 10 years. From February 12 to February 23, the Los Angeles spot price for California reformulated oxygenate blendstock (CARBOB, the petroleum component of gasoline in California) remained the lowest in the nation. On February 23, the specification for CARBOB switched to summer-grade gasoline, which resulted in a one-day price increase of 57%, from 68¢/gal on February 23 to $1.20/gal on February 24.

Gasoline markets on the West Coast, especially in California, are usually tightly balanced and are relatively isolated from alternative sources of supply. This tight balance is typically evident in higher spot gasoline prices compared with the rest of the nation. In 2015, after a major unplanned refinery outage, the Los Angeles CARBOB spot price averaged a 32¢/gal premium over the New York Mercantile Exchange (Nymex) reformulated blendstock for oxygenate blending (RBOB) futures price. However, when California begins the seasonal change from winter gasoline specification to summer gasoline, the markets and prices can exhibit unusual patterns.

Federal regulations, and, in some places, more-stringent state or local regulations, specify the properties of finished gasoline (gasoline that has been blended with ethanol) that can be sold at retail stations across the United States.

Many specifications, like octane rating, remain constant from season to season. However, Reid Vapor Pressure (RVP), a measure of how easily petroleum liquids evaporate, changes to accommodate seasonal temperature variations that affect both the performance of gasoline in an internal combustion engine and emissions. In the winter, higher RVP ensures that gasoline




combusts easily at very low temperatures. In the spring and summer, a lower-RVP gasoline prevents vapor lock, when too much vapor may prevent an engine from starting, and it reduces evaporative emissions into the atmosphere that contribute to smog.

The timing of the shifts from winter-grade to spring-grade gasoline and from spring-grade to summer-grade gasoline vary by region. The transition happens earlier in areas of the country where temperatures warm earlier in the calendar year, like Southern California.

In addition, refineries begin manufacturing spring-grade and summer-grade gasoline well before the date when regulations require it be available at retail stations, because the lower-RVP gasoline blendstock must move through the distribution system before the lower-RVP retail requirement deadline arrives.

Because petroleum product pipeline systems closely monitor and control the quality and composition of the products being shipped, pipelines play an important role in the RVP transition. Petroleum product pipelines have shipping calendars divided into cycles, and the pipelines determine the maximum RVP allowed into their system during a given cycle.

In California, for example, pipelines require RVP of gasoline to transition from the December-January specification of 15 pounds per square inch (psi) to 13.5 psi in February and March, and down to 5.99 from April to October. In November, the RVP goes up again, to 13.5 psi.

In cases where there is excess supply of higher-RVP winter gasoline near the transition deadline, market participants may lower prices for that type of gasoline to move it out of inventory before the RVP changeover. The opposite may also happen when supplies of higher-RVP blendstock run short before the changeover date. Once the transition occurs, prices adjust to reflect the balance of supply and demand for the new gasoline grade.




NewBase 03 March 2016 Khaled Al Awadi

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

Oil prices edge up on rising confidence that market has bottomed Reuters + NewBase

Oil prices edged up on Thursday as sentiment spread that a 20-month long market rout may have come to an end as production slows amid strong demand.

U.S. West Texas Intermediate (WTI) crude futures were trading at $34.73 per barrel at 0229 GMT, up 7 cents from their last settlement. WTI has gained over a third in value since Feb. 11, when prices dropped to little more than $26 per barrels, levels not seen since 2003.

International Brent futures were up 3 cents at 36.96 a barrel, and up almost a quarter since Feb. 11.

Traders said there was a spreading view that a market rout that has pulled down prices by 70 percent since mid-2014 had come to an end as production was stalling while demand remained strong.

"The price action in oil adds to the case that the bottom in the crude oil market could now be in place for 2016," ANZ bank said. Reuters technical analyst Wang Tao said that U.S. crude prices ended a multi-year downtrend this week and that WTI prices would target prices above $40 per barrel in March.

The International Energy Agency (IEA) also said this weak that prices had likely bottomed out. Prices have been driven by dipping output in the United States and rising signs of financial distress in the U.S. oil sector. U.S. oil and gas companies, struggling with a steep fall in global crude prices, faced the worst-ever conditions to get cash to run their businesses, Moody's Investors Service said on Wednesday as its "Oil & Gas Liquidity Stress Index" surged to a record high of 27.2 percent in February.

Oil price special

coverage




Reuters POLL-Oil to average just over $40 a barrel in 2016

Oil prices will average just over $40 a barrel this year due to subdued demand and the likelihood a tentative agreement by leading producers to freeze output will do little to drain a supply glut, a Reuters poll showed on Monday. The price, which has fallen by 45 percent in the last 12 months, is unlikely to recover much beyond its current levels around $34 a barrel until the second half of the year, when output from producers outside OPEC is expected to decline.

The survey of 30 economists and analysts forecast benchmark Brent crude will average $40.10 a barrel, down $2.40 from last month's poll. Brent crude, which averaged about $54 a barrel in 2015, has averaged $32.57 so far this year.

This is the ninth successive monthly Reuters poll in which analysts have lowered their price forecasts. Russia and OPEC members Saudi Arabia, Qatar and Venezuela have agreed to work on a global deal to freeze oil output at January levels if other producers follow suit in a bid to tackle the global crude glut and support prices. But Iran is planning to ramp up its output following the end of Western sanctions and has said the proposal is "laughable". Iraq has also said it will boost production.

"While it's the first coordinated supply move of any kind by OPEC members and Russia in the past 15 years, it is clear that any deal without Iranian and Iraqi participation will do little to tighten the market, at least in 2016," Raymond James analyst Luana Siegfried said.

Analysts are also sceptical that freezing production near record levels will support the market.

Oil prices have fallen 70 percent since mid-2014 due to surplus crude piling up and a decision by the Organization of the Petroleum Exporting Countries in late 2014 to refrain from cutting output to shore up prices, as it had done for decades.

The analysts polled believed supply and demand would not be balanced until late 2016, though the gap between the two is expected to narrow compared with last year. "Although supply will not meet demand before 2017, anticipation of less oversupply should be supportive for oil prices," ABN AMRO senior energy economist Hans Van Cleef said.

"I believe that this agreement is a clear signal that some of the major oil producers indicate that oil prices should not go lower from current levels."

Global demand growth would likely remain subdued in the medium term due to a slowing Chinese economy and a decline in consumption in OECD countries on improving energy efficiencies and a shift towards cleaner fuels, the analysts said.

Analysts see U.S. crude futures averaging $38.90 a barrel in 2016, down $2.10 from the January poll forecast. West Texas Intermediate (WTI) has averaged $31.03 a barrel so far in 2016. Morgan Stanley had the lowest 2016 forecast for Brent at $30 a barrel, while Raymond James had the highest at $53.




NewBase Special Coverage

News Agencies News Release 03 March 2016

Oil and Gas Drillers in the U.S. Ready to Party Like It's 1859 Bloomberg - Dan Murtaugh

The energy business in the U.S. is about to travel 150 years back in time.

Oil and gas companies have cut so much spending amid the biggest price crash in a generation that there are only 502 drilling rigs still active in the country, according to Baker Hughes Inc. In the next few weeks, that could fall below 488, the lowest level in records dating back to 1948, according to Paul Hornsell, head of commodities research for Standard Chartered Bank.

“While there is no consistent series for drilling activity before 1948, we think it likely that to find a lower level of activity would require going back to the 1860s, the early part of the Pennsylvania oil boom,” Hornsell said in a research note today.

Melanie Kania, a Baker Hughes spokeswoman, said she was unable to find information pertaining to rig counts prior to 1949.

The Pennsylvania oil rush began in 1859, when Colonel Edwin Drake struck rock oil near the town of Titusville in the western part of the state. Industrialist Andrew Carnegie visited the area in the early 1860s and was inspired by the frantic activity he found there.




“Everybody was in high glee; fortunes were supposedly within reach; everything was booming,” Carnegie wrote in his autobiography. “On the tops of the derricks floated flags on which strange mottoes were displayed. I remember looking down toward the river and seeing two men working their treadles boring for oil upon the banks of the stream, and inscribed upon their flag was ‘Hell or China.’”

The industry has obviously come a long way since then, and modern rigs are far more productive than rigs from even a generation ago. There is at least one similarity between derricks of yore and today that still holds true, though, Hornsell said.

“Each active rig is the result of a decision to employ capital in the industry, and the current lack of drilling indicates a strong drive to conserve cash,” he said.




Apply energy savings to energy efficiency projects By LAURA RICHARDSON and DOUG PATCH

When energy costs drop, we rejoice. Heating fuel, propane and even electricity unit costs have dropped, some significantly, in recent years. With gasoline well under $2 per gallon – driven by public policy initiatives, global politics, advances in technology and plentiful near-term supply – it’s human nature to spend what we save in energy costs as part of our daily living.

Here’s a better idea: Invest these new-found energy savings in home or business energy projects that provide long-term savings.

The current drop in energy prices won’t last forever; what goes down always seems to come back up. If we invest those savings in energy projects now, we can achieve compounded energy savings down the road. The first excuse often cited for not undertaking energy projects is the lack of upfront money for those projects. Presto, here is the down payment for those projects.

There is no better time to invest in clean energy. Your neighbors are installing solar panels and downtown businesses are embracing energy efficiency, and vice-versa. Schools, libraries and town buildings have had their energy use benchmarked and plans are under way to make significant improvements, all of which will save taxpayers and ratepayers.

Just about all of these projects still need stable financial incentives to move to action. Tying those incentives to new tools such as leases, power purchase agreements or financing significantly leverages upfront, out-of-pocket costs.

Consumers are realizing that these projects are not only good for their wallets, they tap into our Yankee instincts, improve the value of affected and neighboring buildings, and provide many other benefits. Properly insulated buildings are more comfortable, quieter and have better indoor air quality. Who wants to move to a drafty, loud or musty building once you have experienced an efficient one?

Buildings that use solar and wood are supporting local businesses and keeping their energy dollars nearby, all while stabilizing and reducing their operational costs. In short, energy-




efficiency and smaller scale renewable-energy projects are underway in New Hampshire like at no other time in our history.

The state developed an energy strategy in 2015 that provides guidance as to how we can spur our economy while reducing the use of fossil fuels. Scaling up and normalizing energy-efficiency projects means that energy generation needs decline, resulting in fewer and smaller new facilities. With older-generation nuclear and fossil-fuel power plants retiring, this is the ideal time to develop clean, renewable systems and offset demand through energy efficiency. Over time, as more clean-energy and energy storage projects come online, goals that may have seemed a stretch become realistic and attainable.

Meeting as much as 50 percent of our energy needs with renewable sources by 2030 and close to all by 2050 is achievable if the market-transformation wheels continue to spin, technology continues to evolve, and public policies provide the certainty that businesses and capital providers need for their private investment. State and utility rebate programs and policies encourage cost-effective, streamlined and site-appropriate energy projects and balance costs, savings and benefits. Net metering, updated building codes, lighting and appliance standards, and goal-oriented policies address different ways that we can move to a more sustainable future. Think back a decade to where cell phones and the internet were, and then look around your neighborhood and think about what it will look like in 15 years.

It comes down to expectations and priorities. For years we New Englanders clamored for cheaper energy, and now we are starting to see it. Cheap energy, however, often comes at a cost that is not reflected in a utility bill – costs to public health, the environment, and, yes, the economy. Energy efficiency can be significantly more cost-effective and a good long-term offset to the “cheap” energy we are using now. As costs continue to drop for solar and other renewable sources of energy, as policies and programs further encourage the adoption of these technologies and systems, and as we yearn for clean energy solutions and act on those yearnings, we’ll soon reach goals we didn’t think attainable.

How will you – as an individual, at work, and in your community – invest your current savings from low energy prices in a more efficient, cost-effective and cleaner future?

(Laura Richardson is executive director of the Jordan Institute, a Concord-based nonprofit focused on energy efficiency and renewable energy. Doug Patch is a shareholder with Orr & Reno and chaired the state Public Utilities Commission from 1992 to 2001. He is chairman of the Jordan Institute’s board of directors.)




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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

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New base 800 special 03 march 2016