New base 549 special 26 february 2015

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NewBase 26 February 2015 - Issue No. 549 Khaled Al Awadi

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

Aramco to build key projects in Jazan Economic City DHAHRAN, Saudi Aramco + NewBase

Saudi Aramco will build Phase I of the Jazan Economic City (JEC) project which will include smart infrastructure to meet energy, utilities and transportation requirements of a diverse industrial base.

The city will become a key contributor to Saudi Arabia’s economy as the current infrastructure and projects development will provide a solid base for further investments in heavy and secondary industries, petrochemicals, mining and conversion industries, said Khalid A Al-Falih, president and CEO of Saudi Aramco. He was speaking at the Jazan Economic Forum (JEF) today in Jazan City, southwest of Saudi Arabia. “Saudi Aramco has been entrusted to build Jazan’s strategic infrastructure through the development of a refinery and terminal, a power plant, a commercial seaport, a water desalination plant, roads and water and sanitary drainage systems, in addition to connecting electricity,” he said. The forum was inaugurated by Prince Mohammed bin Nasser bin Abdulaziz Al Saud, Governor of Jazan Province; Ali bin Ibrahim Al-Naimi, Minister of Petroleum and Mineral Resources; Abdullatif A Al-Othman, Governor of Saudi Arabian General Investment Authority (Sagia); and Al-Falih. The forum is being attended by over 500 Saudi Arabian and foreign dignitaries and business leaders, and is showcasing investment opportunities at the Jazan Economic City (JEC) project.




In his opening remarks, Al-Falih said the company was proud to play a key role in the development of Jazan. He said Jazan Economic City was part of the Saudi Government’s vision to create economic bases across the kingdom to achieve a diversified economy and balanced regional development. “The Jazan Economic City vision seeks to invest in the region’s natural resources, diverse geographic features and human resources to make a major positive difference to the area's future, so that Jazan will become a significant contributor to the kingdom’s economy,” said Al-Falih. Jazan’s rich endowment of mineral and agricultural resources makes it ideal for the region to prosper and thrive into a major economic city in the Kingdom, he added. Al-Falih also said that Saudi Aramco has taken a pro-active approach to human capital development for the Jazan people by launching a number of training initiatives to create a highly-capable and qualified workforce, drawn primarily from the area's youth, to fill jobs in all stages of the project. These skills and training initiatives began in 2014 when Saudi Aramco and the Technical and Vocational Training Corporation (TVTC) signed the agreement of the Jazan Contractors Alliance for Training and Employment, also known as "Maharat" by launching two training institutes.

“The Saudi Aramco – TVTC alliance is an innovative strategic partnership with the refinery project's contractors to train and employ 5,000 young people from Jazan in various construction-related professions and crafts over four years. Longer term, we aspire for the number of jobs available in Jazan to reach 75,000,” said Al-Falih.




Dubai’s DEWA To Open 100 Electric Vehicle Charging Stations UAE newspapers +NewBase

Dubai Electricity and Water Authority (DEWA) has announced plans to open 100 electric vehicle charging stations in the emirate this year, as part of an initiative supporting the Smart Dubai initiative.

DEWA, which inaugurated Dubai’s first electric vehicle charging station within its main office on Wednesday, also said it is building the infrastructure needed to introduce electric vehicles in the emirate.

The authority will build three types of electric vehicle charging stations compatible with the “latest international technologies used in electric vehicles,” it said in a statement. Fast charging stations that take 30 minutes will be available in petrol stations, while the other two types include charging stations that take four hours, and six to eight hours, respectively.

The setting up of the three types will be based on recommendations by the project’s consultants. The first phase of the project includes installing 16 charging stations for public use. Each station can accommodate two vehicles at the same time.

So far, 12 stations have already been installed at DEWA’s centres, including its head office, the Sustainable Building, Al Wasl, Al Hudaiba, Burj Nahar, Umm Ramool, and Jebel Ali, and they can charge 24 vehicles simultaneously.

One station has been installed in Dubai Silicon Oasis with another and two more due in Dubai Design District (D3) by March 2015. During phase two of the project, 84 charging stations of different types will be installed at Dubai Airports, Dubai Municipality, RTA, shopping malls, petrol stations, hotels, and parking areas. The project is scheduled to be completed in 2015.

The authority is collaborating with national and private organisations including car manufacturers, petrol stations, Dubai Municipality, RTA, hotels, and parking lots owners and operators in Dubai, the statement said.




DEWA is also working with real estate developers, including Emaar and Nakheel, to determine the most appropriate sites to set up the stations, it said.

The initiative will support DEWA’s efforts to reduce Dubai’s carbon footprint, protect the environment, and drive the city’s sustainable development, said Saeed Mohammed Al Tayer, MD and CEO of DEWA.

“The first station is an important step towards achieving the objectives of the sustainable smart city and transforming Dubai into the smartest city in the world,” he said.

The move supports the Smart Dubai initiative, launched by Sheikh Mohammed bin Rashid Al Maktoum, VP and PM of the UAE and Dubai’s ruler, which aims to help the city provide efficient and quick services to residents and visitors.

“It also supports the Dubai Plan 2021 and the Dubai Integrated Energy Strategy 2030 to establish Dubai as a global hub for trade, finance, tourism, and sustainability, and a global role model of the highest standards of energy efficiency,” said Al Tayer.

Towards achieving that goal, DEWA is currently implementing three main initiatives.

“These are connecting solar energy to houses and buildings, smart applications through smart meters and grids, and the infrastructure for vehicle charging stations. DEWA has started implementing the electric vehicle charging station infrastructure initiative,” said Al Tayer.

“We are confident this project will have the full support of Dubai residents as well as government and private organisations,” he added.




Algeria Sonatrach Three oil fields discovered in 2015 APS + NewBase

Three oil fields were discovered by the national hydrocarbon group Sonatrach since the beginning of 2015, said Wednesday in Oran Chief Executive Officer of the oil company Said Sahnoun.

“Sonatrach discovered for the year 2015, on its own account, three oil fields of extremely important quality,” Sahnoun told APS on the sidelines of the festivities commemorating the 40th

anniversary of the nationalization of hydrocarbons, hosted by the petrochemical zone of Arzew.

The first oil discovery was made in the region of Touggourt while the second in Ghardaia. The third gas field was discovered in El Bayadh, said the official. These discoveries are being assessed by Sonatrach, followed by an appraisal programme that will start very shortly, added

the source. Sahnoun said that the flows are “extremely encouraging ,” adding that they range between 3,000 and 4,000 barrels/day.




Japan: LED Light Bulb Helps Japan Fill Energy Gap Left From Shutting Down Nuclear Reactors. Bloomberg + NewBase

Japan’s push to keep power flowing after it shuttered its nuclear program may best be illustrated

by 73 million light bulbs.

That’s the number of LED bulbs sold in Japan since the start of 2012, representing about 30 percent of all bulbs sold there. The LEDs, which consume a fifth of the energy used by standard lights, are key to the country’s strategy to make energy use more efficient, even as it pursues alternative sources such as solar power.

Four years after the Fukushima nuclear meltdown spurred the closure of Japan’s many reactors, knocking out 30 percent of Japan’s power supply, the drive to reduce energy consumption has sparked a national campaign that includes everything from improved insulation for homes to train stations powered by the braking of subway cars and vending machines that recycle waste heat and generate power with solar panels on top.

“There’s no doubt Japan has some of the most advanced technologies in energy saving,” said Takumi Fujinami, a senior researcher at the Japan Research Institute. “And there is still room for saving energy dramatically.”

Since Fukushima, the nation’s utilities have been forced to fire up older power plants that rely on fossil fuels such as natural gas, oil and coal. That’s helped make up for some of the capacity, but not all. The decision to reduce consumption was a natural ally in the effort.

Longer Life

Hiroshi Amano, who shared last year’s Nobel Prize for physics, sees LEDs playing an even bigger role. Japan could cut annual electric spending by as much as 1 trillion yen ($8.4 billion) within five years by using more LEDs, according to Amano, one of three Japan-born scientists who were awarded the Nobel Prize in 2014 for their work developing LEDs.

While LEDs cost as much as $10 apiece, compared to as little as 70 cents for incandescents, the fact that they’re more efficient “can extend shelf life and reduce the total cost and power use,” Amano told reporter last month.

LEDs, or light-emitting diodes, are built using semiconductors that allow passage of electrons through the material to produce light, requiring less energy than incandescent bulbs that heat a wire filament until it glows.

LED sales in Japan reached $5.2 billion in 2013, according to an October report from the International Energy Agency. Switching all of Japan’s lighting to LEDs would save about 92.2




terawatt hours of electricity, 9 percent of Japan’s total annual consumption, the Institute of Energy Economics, Japan, estimated in 2011.

Nuclear Alternatives

Japan is pursuing a variety of alternatives after shuttering its nuclear plants for safety checks, pulling 47 gigawatts of capacity from the grid. Subsidies for solar power, which are triple what Germany offers, have made Japan the biggest market for the technology in the world behind China.

The options run from old standbys such as making sure homes are insulated to ideas that offer a unique take on how to keep consumption under control.

The government has set a goal for all new public buildings and homes to be net zero energy by 2030, meaning they use only as much energy as they can produce from renewable sources and other generation systems on site. Currently, about 40 percent of existing homes have no insulation, according to a December task force report.

Meanwhile, Mitsubishi Electric Corp. said in September that a system installed at a Tokyo subway station to harvest energy generated by braking subway cars saved enough to run 60 homes. The power is being used for station lighting, air conditioning and elevators, the company said.

Falling Consumption

All of these efforts are apparently paying off, according to a task force on power demand for the trade ministry. Power used by the nation’s nine regional utilities fell by 10 terawatt-hours in July and August thanks to conservation measures, compared with the same period before the Fukushima disaster, the task force found. Overall for the fiscal year ending March 31, consumption fell in eight of the first nine months, with declines ranging from 1 percent to 8 percent.

Results from the consumption campaign are also being felt within the industrial community. Komatsu Ltd., the world’s second-largest producer of construction equipment, is among companies working to reduce electricity use at production sites. An assembly plant that opened in May in the northwestern prefecture of Ishikawa consolidates two old plants and is designed to halve electricity use by incorporating such technologies as energy storage and LED lighting.

“We had been working to cut the power use by half after the Fukushima earthquake and it turned out the efforts also led to better productivity,” said Hiroshi Ishihara, a Komatsu spokesman. Komatsu reduced total electricity use by 38 percent in fiscal 2013 from 2010.

100% diffusion of LEDs in Japan by 2020 has the potential to displace seven nuclear reactors' worth

of power demand (that is equivalent to about 7 gigawatts of power). Also projects savings of roughly

19 nuclear reactors' worth of power in the United States by 2020 through the use of LED lighting.

LED lighting is also in a very disruptive phase, according to the report, with the evolution of new

services, IT applications, and even organics. LED is one area where we clearly see that the global

energy industry and energy applications are in the midst of an industrial revolution that melds

energy, IT and biotechnology, well over 20% of GDP for an industrial economy like Japan's.




Kazakhstan: Jupiter Energy announces Kazakhstan operations update Source: Jupiter Energy

AIM-listed Jupiter Energy has provided an update on operations at its 100%-owned exploration

permit - Block 31 - in the Mangistau Basin, West Kazakhstan, where the Company is preparing

to test well 19.

Key Points:

• Well 19 has been drilled to its final depth of 3068m; mud logs and open hole wireline logs indicate hydrocarbons in the Mid Triassic horizon.

• Initial analysis indicates 99.4m Total Vertical Depth Sub Sea (TVDSS) of gross reservoir and approximately 84.6m (TVDSS) net pay in the Mid Triassic T2B carbonate reservoir unit.

• In addition, analysis of the Mid Triassic T2A carbonate reservoir indicates an additional 15.4m (TVDSS) of gross reservoir and approximately 10.4m (TVDSS) of net pay.

• Cut offs of 3.8% porosity was used in the analysis.

• Production casing is being run and cemented prior to perforating underbalanced and completing a brief well test on the Mid Triassic T2B Horizon. Thereafter, the well will be shut in.

• The well 19 is highest on the Akkar East structure, which also includes the J-51, J-52 and J-53 wells.




Well 19 is the Company's eighth well on Block 31, Jupiter's 100 per cent owned permit situated onshore Kazakhstan just east of the city of Aktau and the Caspian Sea. The well is located in an area of already existing C1 reserves, between the already flowing J-51 and J-52 wells.

Well 19 took a total of 53 days to drill and reached a total depth of 3,068m on 16 February 2015; the performance of the drilling operation was in line with expectations. Open hole logs have been acquired and production casing is now being run in preparation for a brief period of well testing.

Hydrocarbon shows while drilling, mud logging, and subsequent open hole wireline logs all indicated hydrocarbons in the Mid Triassic reservoir. The open hole logs indicated good levels of oil saturation and porosity, similar to that of the J-51 and J-52 wells which were also drilled on the same structure.

Analysis by local independent consulting firm Reservoir Evaluation Services LLC ("RES) confirmed some 99.4m (TVDSS) of gross reservoir and approximately 84.6m (TVDSS) of net pay at the Middle Triassic T2B carbonate reservoir unit, the primary reservoir objective in the well.

In addition, analysis also confirmed an additional 15.4m (TVDSS) of gross reservoir and approximately 10.4m (TVDSS) of net pay at the Middle Triassic T2A carbonate reservoir unit.

Cut offs of 3.8% porosity was used in the analysis.

Forward Plan:

The forward plan, after cementing of the production casing, is to perforate the Mid Triassic T2B underbalanced with tubing conveyed perforating guns and complete a brief well test to perform pressure transient analysis to evaluate the properties of the reservoir.

The well will then be shut in. Whilst the well is already approved for Trial Production, the well is being shut in with the remainder of the Akkar East wells until such time that domestic oil process make trial production operations economically viable.

Further updates on progress with well 19 will be provided in due course.




US:Gasoline prices drop wipes out profits for Ethanol Makers Bloomberg + NewBase

Ethanol producers are cutting output after getting squeezed by the biggest drop in gasoline prices since 2008.

Valero Energy Corp. and Green Plains Renewable Energy Inc., representing about 15 percent of U.S. capacity, have reduced operations as margins narrowed. At a typical mill in Illinois that makes ethanol from corn, profit margins have almost totally disappeared, compared with $1.33 a gallon a year ago, according to AgTrader Talk, a Clive, Iowa-based consulting company.

Gasoline and crude fell more than 50 percent from their peaks in June as the U.S. shale boom helped global oil production outpace demand. While that was good for consumers, saving each American household $750, it dragged down the cost of ethanol 41 percent because the price is linked to gasoline. At the same time, corn, the main raw material used by biofuel producers, fell

just 19 percent.

“Gasoline is down a lot and corn has come back up a bit,” Wallace Tyner, an agricultural economist at Purdue University in West Lafayette, Indiana, said by phone Feb. 23. “If you’re an ethanol producer, that doesn’t leave you much.” Gasoline lost 0.5 percent to $1.6125 a gallon in electronic trading on the New York Mercantile Exchange at 2:06 p.m Singapore time.

Ethanol Production

U.S. ethanol output fell 2.8 percent to an annualized rate of 14.8 billion gallons in the week ended Feb. 13 from a record 15.2 billion in December, according to the Energy Information Administration. Valero said Jan. 29 that it slowed run-rates by 2.6 percent for the first quarter, citing lower gasoline and ethanol prices and “relatively stable” corn costs. Green Plains Chief Executive Officer Todd Becker said Feb. 5 that he’s cut production rates “a bit as well.”

An ethanol plant runs at the Port of Stockton in Stockton, California,

Friday, March 7, 2014. A deep water port located 75 miles from San

Francisco, over 1 billion dollars of cargo passes through the facility every

year.




Lakeview Energy LLC, a Chicago-based renewable energy company, lowered operating rates by 15 percent at its Coshocton, Ohio, Chief Operating Officer Eamonn Byrne, said Tuesday by phone.

More cutbacks appear likely. U.S. inventories total 21 million barrels, the highest seasonal level since 2012, according to the EIA, the Energy Department’s statistical arm. Supply will tighten as plants with higher costs slow, according to Archer-Daniels-Midland Co. Chief Executive Officer Juan Luciano, whose company is the biggest U.S. producer.

Making Biofuel

One bushel of corn yields 2.75 gallons of ethanol in a manufacturing process similar to distilling alcohol. Almost all gasoline sold in the U.S. contains the biofuel, with the additive making up as much as 10 percent of overall consumption, government data show.

Unlike crude oil, which is primarily used to make gasoline and other motor fuels, corn is sold in diverse markets. An ethanol company competes with food processors, livestock producers and export customers for corn, Purdue’s Tyner said.

That means corn and oil prices don’t always move in the same direction.

Corn is trading at $3.775 a bushel on the CBOT, 15 percent less than the $4.43 it took to produce last year’s crop, according to data from Iowa State University’s Ag Decision Maker. At current ethanol prices, a producer could eke out a profit if corn were $3.25, Tyner said.

Losing Money

Factoring in costs for overhead, an Iowa distillery is losing 9 cents on every gallon and an Illinois plant is earning 1 cent, AgTrader Talk estimates.




“Ethanol’s got a job to do; one is to stay in line with corn so you don’t lose so much money that you have to shut down,” Mike Blackford, a consultant at INTL FCStone in Des Moines, Iowa, said in a Jan. 20 telephone interview. “On the other hand, you have to stay competitive with gasoline.”

There have been periods this year when it was uneconomical to blend the fuel into gasoline, Tyner said. The fuel’s share of the gasoline market is 2.1 percent lower than a year ago, EIA data show.

In those instances, refiners are able to meet government consumption targets with tradable certificates that they get from blending biofuel, called Renewable Identification Numbers, or RINs. RINs have gained 36 percent in the past year to 71.9 cents a gallon on the New York Mercantile Exchange.

Renewables Mandate

A 2007 energy law requires refiners to use biofuels, such as ethanol. Oil refiners and renewable energy supporters have been locked in a battle over the law’s merits and Environmental Protection Agency is currently finalizing targets for last year and this one.

Current market conditions contrast with an 18-month stretch that started in June 2013. Then a typical ethanol plant made on average 63 cents a gallon, data from Iowa State’s Center for Agricultural and Rural Development in Ames show. The industry produced about 13.9 billion gallons, with potential profit of $8.8 billion, based on the Iowa State estimates and EIA data.

Green Plains CEO Becker predicts companies will tire of seeing losses mount in the current market. “People will realize very quickly that they will burn through cash,” Becker said. “They would lose less money by shutting down. We had a great run for 18 to 20 months.”




Oil Price Drop Special Coverage

Brent holds steady around $59, Saudis say oil demand growing

Brent crude held steady around $59 a barrel on Wednesday as Saudi Arabia’s oil minister said oil demand is growing and markets are calm. Oil prices crashed by 60 per cent between June and January to a post-2009 low near $45 a barrel but have since recovered.

“Markets are calm now ... demand is growing,” said minister Ali Al Naimi, the driving force behind Opec’s shift in policy at its November meeting, when the group decided not to cut output to support prices but instead to fight for market share.

Brent has been helped by better-than-expected Chinese factory data, the Federal Reserve’s flexible stance on US interest rates and the Eurozone’s approval of reforms proposed by Greece.

But US crude was weaker after settling lower for the fifth consecutive session on Tuesday on a bigger-than-anticipated crude stock build-up. Brent had fallen 10 cents to $58.56 a barrel by 0945 GMT, while US crude futures fell 30 cents to $48.98 a barrel.

China’s factory sector showed marginal expansion, according to the flash HSBC/Markit Purchasing Managers’ Index. It inched to a four-month high of 50.1 in February, just above the 50 level that separates growth in activity from contraction. A Reuters poll of economists had forecast a reading of 49.5.

“That’s good news (as it means) potential oil demand, but I think the market needs to see more stable and concrete demand from China,” said Yusuke Seta, a commodity sales manager at




Newedge Japan. The same Chinese survey showed new export orders from the world’s second-largest oil consumer shrank at their fastest rate in 20 months.

Oil prices drew support from Fed Chair Janet Yellen’s suggestion that the US central bank was preparing to consider raising interest rates “on a meeting-by-meeting basis”. Some investors took that to mean rates may start rising later than June, the month on which markets had been focusing.

Still, concern about excess oil supplies weighed on the market, limiting the impact of positive macroeconomic news. US crude inventories rose by 8.9 million barrels last week as refineries cut output, versus an expected 4 million barrels,/sdata from industry group the American Petroleum Institute showed on Tuesday.

Meanwhile, Libya has resumed pumping crude from the Sarir and Messla oilfields at a rate of around 40,000 barrels per day to the port at Hariga after power was restored.

The Japanese Aren't Benefiting from Cheaper Oil-The Yen to blame Bloomberger

Spare a thought for Japan -- the nation imports almost all its energy and stood to make windfall gains from the collapse in oil prices, only to see the benefits slip away as the yen slumped to near seven-year lows.

This means that Japanese consumers and companies aren't getting as big a boost as in the U.S. and elsewhere, even as the government is counting on them to increase spending to help boost an economy recovering from a recession.

Brent, the benchmark contract for more than half the world’s oil, has fallen more than 40 percent from a June peak, while gasoline in Japan dropped just 11 percent over the same period, according to data from the economy ministry. The yen has weakened more than 14 percent against the dollar over that period, making imports more expensive.




The currency fell as the Bank of Japan pumps unprecedented monetary stimulus in an attempt to drag the nation out of two decades of deflation. The weaker yen has boosted revenues of large exporters, even as higher import prices hurt small companies and consumers.

"The depreciation of the yen has eaten up 20 percent of the oil price drop," estimates Credit Suisse Group AG Chief Investment Officer Soichiro Matsumoto. "The impact of lower oil prices is much larger in the U.S. market, not only for American cars which consume lots of gasoline, but for the whole economy."

Gasoline in Japan was the cheapest this month since January 2011, while prices in the U.S. fell to their lowest in January since 2009, according to Heathrow, Florida-based AAA. Americans used these savings to increase spending at restaurants and grocery stores.

Tax is another reason why gasoline prices in Japan aren't falling as quickly. The fixed 53.8 yen/liter tax on petrol doesn't change with the price, and made up 40 percent of the 135.4 yen average price per liter last week. There is also an 8 percent sales tax.

Certainly, the Japanese don't drive anywhere near as much as Americans do. In 2009, licensed drivers in the U.S. drove an average of about 14,000 miles, according to the Department of Transportation. In Japan, the average vehicle was driven about 2,840 miles in 2013, according to a Japan Automobile Manufacturers Association survey.




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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 February 2015 K. Al Awadi




Economy & Finance

New base 549 special 26 february 2015