new base energy news issue 955 dated 24 november 2016

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 Energy News 24 November 2016 - Issue No. 955 Edited & Produced by: Khaled Al Awadi

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Qatar: RasGas delivers debut LNG cargo to France terminal Gulg Times

RasGas has delivered its first liquefied natural gas (LNG) cargo to the Dunkerque LNG Regasification Terminal in France. The cargo aboard RasGas’ Maran Gas Asclepius was delivered to the EDF Group on Tuesday.

“RasGas is proud to support the startup operations of this new LNG Regasification Terminal in France through the delivery of this cargo,” said RasGas CEO Hamad Mubarak al-Muhannadi. “We look forward to the successful start-up of commercial operations at the terminal and commencing deliveries in 2017 under our recently executed medium-term Sales and Purchase Agreement (SPA).”

Marc Benayoun, executive vice president (Gas and Italy) of EDF Group and Edison CEO said, “EDF is very satisfied with the smooth delivery of the RasGas cargo which is necessary to perform the final stage of the commissioning tests of the Dunkerque LNG Regasification Terminal.




This is another example of the excellent relationship between RasGas and the EDF Group. This long-term partnership started thirteen years ago with the signing of a Long Term LNG Sales and Purchase Agreement with Edison and the construction of the offshore Adriatic LNG regasification terminal in Italy.”

Established by Qatar Petroleum and ExxonMobil RasGas exports LNG to countries across Asia, Europe and the Americas. It has a total production capacity of approximately 37mn tonnes a year.




Iraq has to up oil output because of 'budget hole': FM AFP

Iraq has to up its crude output because dwindling oil prices and the fight against Islamic State have left "a huge hole" in the economy, Foreign Minister Ibrahim al-Jaafari said Tuesday, as the

OPEC cartel scrambles to agree a production cut deal.

"As oil makes up for more than 90 percent of Iraq's budget, a huge hole was knocked in the budget by the fall in prices right at the same time as we have had to increase spending on the army due to the fight against IS," al-Jaafari told reporters during an official visit in Budapest.

"We need international understanding because we have to increase production in this situation. Iraq may be a rich country but it has huge problems. It wouldn't be fair now if we decreased production," he added.

Iraq, OPEC's second-largest oil producer, has been pumping more oil over the past few months to reach an average of 4.56 million barrels per day (mb/d) in October. In a surprise move, the Organization of the Petroleum Exporting Countries in September agreed a deal to trim production and boost prices depressed since 2014.

The accord -- aimed at cutting output by 750,000 million mb/d to between 32.5 and 33 mb/d -- is meant to be finalised on November 30 in Vienna.

But OPEC's 14 members have been at odds over the details of the plan, which is supposed to lead to a wider accord with non-OPEC producers including Russia -- the world's largest producer alongside cartel kingpin Saudi Arabia.

In addition to Iraq, Iran, Nigeria and Libya have also insisted they should be exempt from lowering their output. OPEC officials held a series of technical meetings ahead of the key conference in the Austrian capital to iron out differences in the deal.

Speculation was mounting this week that the experts may be close to a deal to tackle the global supply glut, sending crude prices and energy stocks surging. "There is certainty that everybody is on board," Nigerian OPEC delegate Ibrahim Waya was quoted by Bloomberg News as saying in Vienna on Tuesday.

In its November monthly report, OPEC said its members pumped 33.64 mb/d in October, 236,000 barrels more than in September.




US: Keystone pipeline Reviving by Rescinding LBJ’s Order Bloomberg - Jennifer A Dlouhy

Advisers to Donald Trump are exploring ways he can green light the Keystone XL oil pipeline on the day he is sworn into office, including by rescinding a 48-year-old presidential order.

Two people familiar with Trump’s transition planning say the issue is actively being discussed, as the incoming president looks for ways to jump-start infrastructure development and deliver on a campaign promise to approve the pipeline that would connect Canadian oil sands with U.S. Gulf Coast refiners.

Although details are still being developed, the strategy hinges on Trump rescinding a 1968 executive order that put the State Department in charge of permitting border-crossing oil pipelines, said the people, who spoke on the condition they not be named discussing internal deliberations. That directive, issued by President Lyndon B. Johnson, assigned the State Department responsibility for determining whether proposed projects serve the "national interest."

Trump’s actions wouldn’t guarantee the pipeline’s construction in the face of environmental opposition that helped kept it in limbo for years. "If Trump grants the permit, there will be a massive backlash, both on the ground and in the courts, that could tie this project up for years," said May Boeve, executive director of the climate action group 350.org.

Legislation proposed in Congress also would shift responsibility for vetting any pipelines and power lines proposed to cross the U.S. border with Canada and Mexico, but Trump doesn’t need to wait for Capitol Hill.

Environmental Review

He can rescind the Johnson-era executive order immediately, said Susan Dudley, director of the Regulatory Studies Center at George Washington University. As easily as presidents issue executive orders, they can rescind them, Dudley said.

Oil pipelines generally would still be subject to environmental review, even if the State Department isn’t involved. And TransCanada Corp. may need to submit another formal application to build Keystone XL. But the company’s plans to build Keystone XL already have been vetted, with years of environmental scrutiny culminating in President Barack Obama’s decision last year that the pipeline was not in the U.S. interest.




The Calgary-based company has not explicitly said it would reapply for permission to build the pipeline, but the day after Trump’s election, TransCanada said it was looking for ways to convince the new administration of the project’s benefits to the U.S. economy.

TransCanada spokesmen did not respond to telephone calls and e-mails seeking comment Wednesday.

Energy Flashpoint

Environmentalists fiercely battled the project, making it a flashpoint in broader debates about U.S. energy policy and climate change. Landowners in the pipeline’s path warned that a spill of dense oil sands crude could contaminate the Ogallala aquifer, a source of drinking water that stretches

from Texas to South Dakota. And activists said it would promote further development of oil sands in Alberta, Canada that generally require more energy to extract.

Those objections won’t be obliterated with the stroke of Trump’s pen, said Boeve, with 350.org.

"Keystone was always a bad deal for the climate, for landowners, and for workers, who got sold a bunch of false promises about the number of jobs the pipeline would create," Boeve said. "If Trump’s really such a businessman, he’ll see right through this boondoggle and focus his support for the clean-energy economy instead."

Trump has already said Americans should glean more benefits from the project, insisting in May that he wants a "better deal."

"National Interest"

“I want the Keystone pipeline, but the people of the United

States should be given a piece, a significant piece of the profits," Trump told reporters in North Dakota.

The State Department’s role in vetting pipelines crossing U.S. international borders has deepened in the decades since Johnson’s original order. Requirements for consulting with other federal agencies were added in 1994, and in 2004, former President George W. Bush outlined more procedures for reviewing presidential permit applications.




TransCanada has filed a $15 billion arbitration claim challenging Obama’s rejection of Keystone XL under the North American Free Trade Agreement.

Canada’s government has largely avoided raising Keystone since the U.S. election, saying it’s up to the company to reapply for American approval.

Canadian Reaction

"The government will continue to support the project," Natural Resources Minister Jim Carr told Canada’s House of Commons on Oct. 16. "All of the approvals north of the border are in place. They will not run out."

Canada, meanwhile, is facing decisions on three other pipelines over the next month -- Enbridge Inc.’s Line 3 and Northern Gateway projects, each due Nov. 25, and Kinder Morgan Inc.’s Trans Mountain expansion, due Dec. 19. Prime Minister Justin Trudeau’s government has downplayed the significance of Keystone, which is an inland route, saying Canada is still focused on building a new pipeline to the ocean to sell its oil to markets beyond the U.S.

If Trump removes the State Department’s authority to scrutinize border-crossing pipelines, federal regulators would still play a role vetting those projects. Federal agencies including the U.S. Army Corps of Engineers and the Interior Department are involved in permitting oil pipelines. That architecture would largely be untouched by action merely removing the State Department’s role.

The Association of Oil Pipe Lines said it would welcome changes that streamline permitting.

"Almost everyone would agree the current system under President Obama is broken," said John Stoody, the group’s vice president of government and public relations. "Pipeline operators would welcome reforms that lead to expeditious consideration and decisions on border-crossing pipeline projects."




NewBase 24 November 2016 Khaled Al Awadi

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

Oil prices static on uncertainty over planned production cut Reuters + NewBase

Oil prices were little changed on Thursday as uncertainty ahead of a planned OPEC-led crude production cut and thin liquidity due to the U.S. Thanksgiving holiday kept traders from making big new bets on markets.

International Brent crude oil futures were trading at $48.90 at 0209 GMT, down 5 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $47.94 per barrel, down 2 cents from their last settlement.

Traders said market activity was low due to the U.S. holiday, and there was a reluctance to take on big price directional bets due to uncertainty about a planned oil production cut, led by the Organization of the Petroleum Exporting Countries (OPEC).

OPEC is due to meet on Nov. 30 to coordinate a cut, potentially together with non-OPEC member Russia, but there is also disagreement within the producer cartel as to which member states should cut and by how much.

"The Thanksgiving Holiday today has thinned traders interest ... but the OPEC result next Wednesday is the only game in town for energy traders," said Jeffrey Halley, senior market analyst at OANDA brokerages in Singapore.

Most analysts believe that some form of a production cut will be agreed, though it is uncertain whether this will be enough to prop up a market that has been dogged by a fuel supply overhang for over two years.

Beyond OPEC, traders said the strong U.S.-dollar, which is at levels last seen in 2003 against a basket of other leading currencies, was influencing oil prices. A strong dollar, in which oil is traded, makes fuel purchases more expensive for countries using other currencies at home, potentially crimping demand.

Oil price special

coverage




OPEC’s Latest Headache: Russian Reluctance to Cut Oil Production Bloomberg - Grant Smith

For months, Russia has told OPEC its preferred option in any eventual oil-supply deal was to freeze production, rather than to cut it. It’s dawning on the group that Moscow may actually mean it.

While Russia talked about a freeze, Saudi Arabia and its allies privately expected Moscow would eventually join a cut if the Organization of Petroleum Exporting Countries delivered its own reduction, according to people briefed on the matter, who asked not to be named because of the sensitive nature of the talks.

Several OPEC members are adamant Russia must reduce supply if the plan to ease a global glut is to succeed. Just one week before OPEC’s ministerial meeting in Vienna, that prospect seems less likely.

The two views are set to clash on Nov. 28 in talks between OPEC and non-OPEC nations. The outcome may decide whether there is any eventual agreement. Russia, Azerbaijan and Mexico are set to participate, according to people familiar with the arrangements. Others that have attended previous gatherings, including Oman, are not joining this time.

If Russia and other non-OPEC producers balk at the idea of cutting output, Saudi Arabia could reconsider pushing ahead.

“The negotiations will continue until the very end, and the deal is likely to go down to the wire,” said Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd. in London.

Russian Energy Minister Alexander Novak on Wednesday said that a delegation plans to meet Saudi Arabia and others on Monday, but that it was too early to say whether the nation would join the formal OPEC ministerial meeting Nov. 30.




It’s easy to see how the Saudis and other OPEC members may have gotten it wrong. Russia never explicitly ruled out cuts, merely saying it favored a freeze at current levels -- a record 11.2 million barrels a day. But recently the message from the Kremlin, at least in public, has been more uncompromising.

“There is no difficulty for us to freeze production,” Russian President Vladimir Putin said on Sunday after a regional conference, in comments that some OPEC delegates have taken as all but ruling out cuts.

Even as Russia talked about a freeze, it continued to ramp up output. Since September, when Putin and Saudi Deputy Crown Prince Mohammed bin Salman sat down for the last round of bilateral oil talks, Moscow has added another half a million barrels of daily production.

“Saudi Arabia is very worried about Putin’s comments suggesting Moscow will merely freeze at current post-soviet record levels,” said Alexandre Andlauer, head of oil at research firm Alphavalue in Paris.

OPEC has enough problems without Russian intransigence. Preliminary talks in Vienna this week failed to agree on production quotas, leaving the biggest obstacles to a deal -- how to treat newly resurgent producers Iraq and Iran -- to be settled at the meeting next week.

Iraq’s Prime Minister Haider Al-Abadi said Wednesday the nation is now willing to shoulder part of the burden of cuts, potentially removing one obstacle to a deal.

Moscow and other non-OPEC members want specifics before making any commitment and will take a “wait and see” approach, according to a non-OPEC delegate who asked not to be named to avoid jeopardizing the talks.

The hesitation from producers outside OPEC is understandable. Earlier this year, Saudi Arabia sank an output-freeze agreement because of the non-participation by its old foe, Iran.

The Saudi U-turn left Novak, who put a significant amount of political capital into the failed deal, empty handed. It also was a vindication for those in Moscow who have been skeptical about a pact with OPEC, including the powerful head of state-owned oil producer Rosneft PJSC, Igor Sechin.




NewBase Special Coverage

News Agencies News Release 24 November 2016

Bruised Oil Nations Seek Solace in Fastest Growing Guzzler Bloomberg - Dhwani Pandya

As the oil market anxiously awaits OPEC’s decision next week, some of the countries hardest hit by the biggest price crash in a generation may have found a lifeline outside of the group.

India, the world’s fastest growing crude consumer whose appetite for fossil fuels is forecast to surge in the next two decades, will likely decide next month on whether to advance $15 billion to Nigeria for future supplies. Essar Oil Ltd., operator of India’s second-biggest refinery, has struck a $13 billion deal which may lead to the plant processing more oil from Venezuela.

With prices languishing at under $50 a barrel, about 55 percent below its 2014 peak, smaller sellers have been the most vulnerable to falling revenues. Nigeria has been pushed to the brink of its first full-year economic contraction in 25 years, while Venezuela struggles to ward off a debt default at its national oil company. Now the two crude producers are finding their own means of survival as OPEC seeks to resolve an impasse over output cuts aimed at stabilizing the market.

“Countries like Venezuela and Nigeria, reeling under financial crisis, will challenge any OPEC decision that works against their economic interests,” said Kunal Agrawal, an analyst with Bloomberg Intelligence. “These countries want to secure long-term supply contracts with the likes of India and China.”




India, which imports more than two-thirds of its oil from the Middle East and whose demand is forecast to double through 2040 to 10.3 million barrels a day, is seeking to diversify its purchases to guard against the geopolitical risks tied to the world’s biggest suppliers like Saudi Arabia and Iraq. Over 80 percent of India’s crude is imported, and with a burgeoning population and an economy projected to grow 7.4 percent next year, companies such as the U.K.’s BP Plc and Russia’s Rosneft PJSC are eyeing a piece of an oil retail market already worth $117 billion.

Rosneft has indicated it intends to process crude from its share of oil fields in Venezuela at Essar’s refinery after the Russian company’s acquisition of the facility at Vadinar in western India. Nigerian oil minister Emmanuel Ibe Kachikwu said last month that the West African nation is looking to sign a pact with the Indian government for $15 billion in advance payments for its oil in December.

Welcome Respite

“You can’t depend on one country, but you have a basket of countries from where you take,” said Mukesh Kumar Surana, chairman of India’s state-run refiner, Hindustan Petroleum Corp. “So there will be opportunities for smaller producers.”

Those deals are a welcome respite for Nigeria and Venezuela. Nigeria, which counts oil as its biggest foreign-exchange earner, could see its gross domestic product shrink 1.7 percent this year, according to the International Monetary Fund, its first full-year contraction since 1991. Venezuela has faced widespread shortages of food and essential products as the price of oil, which accounts for 95 percent of its foreign currency earnings, collapsed.

The Latin American nation’s state-owned oil company, Petroleos de Venezuela SA, has struggled with its finances this year after the price it receives for its exports has plummeted 63 percent from over $100 a barrel in 2014. PDVSA, as the company is known, said last month that creditors holding $2.8 billion of bonds that come due over the next year agreed to extend maturities in a highly anticipated swap that will buy the company some time.

OPEC Meeting

Its finances were thrown into doubt again this week, after JPMorgan Chase & Co. said in a report that PDVSA hadn’t fully paid coupons on bonds due 2021, 2024 and 2035. PDVSA said it has paid what’s due on the 2021 and 2024 bonds and blamed the delay on an administrative problem at Citigroup Inc. The company’s president, Eulogio Del Pino, confirmed it was using a 30-day grace period for bonds due in 2035 without saying why.

As the Organization of Petroleum Exporting Countries prepares to make a decision on Nov. 30, oil has rebounded about 10 percent since the middle of this month amid signs of renewed diplomatic efforts to agree on an output cut. Brent crude, the benchmark for more than half the world’s oil, traded in London at $48.94 a barrel by 9:22 a.m. Singapore time. West Texas Intermediate, the U.S. marker, was at $47.98 in New York.

Goldman Sachs Group Inc. is now “tactically bullish” on the likelihood of an agreement, and expects oil prices in New York to average $55 a barrel during the first half of 2017, up from previous estimates of $45 and $50 for the first and second quarters.

But for now, India may be the oil sellers’ best hope.

“We are a solvent buyer. Anyone who is in need of selling, we are in need of buying,” said Lalit Kumar Gupta, chief executive officer of Essar Oil. “Our growth is real.”




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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 26 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 November 2016 K. Al Awadi

new base energy news issue 955 dated 24 november 2016

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