newbase 637 special 30 june 2015

Copyright © 2015 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,

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NewBase 30 June 2015 - Issue No. 637 Senior Editor Eng. Khaled Al Awadi

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

Ocean Crossing To Hawaii : the Moment of Truth. Will the third time be lucky?

Endeavoring to reach Hawaii from Japan to encourage the use of clean technologies, the solar powered aircraft of Bertrand Piccard and André Borschberg attempts the longest exploration leg of the Solar Impulse’s Round-The-World mission. At the controls, André will venture into the unknown. This flight is demanding and challenging particularly given its duration: 120 hours on solar power only. It is a feat never accomplished before in the world of aviation.

Solar Impulse 2 sets off on Pacific crossing from Japan to Hawaii, expected to last five days

The Solar Impulse 2 set off about 3am from Nagoya, Japan, en route to Hawaii, a trip expected to take five days and nights of continuous flight. The Pacific crossing represents the most difficult leg of Andre Borschberg’s attempt to circumnavigate the world in a multi-stage flight.

Borschberg was delayed in Nagoya for weeks after “a wall” of bad weather forced an unplanned landing and his original flight, from Nanjing, China, was diverted in early June to Japan. The Swiss pilot flew for 44 hours from Nanjing to Nagoya – two days and two nights – and rested only in 20 minute intervals. To cross the Pacific he will have to repeat the feat two and a half times over.




“We really are in the moment of truth now,” Conor Lennon, a member of the Solar Impulse team said from the project’s headquarters. “It’s the moment of truth technically and in human terms as well. Can the plane manage it?”

“There’s a lot of uncertainty at the end, we cannot know everything,” Bertrand Piccard, Borschberg’s project co-founder and occasional co-pilot, said after the team decided to fly. “Today we accepted the decision to go, we accepted that risk, we believe the window is good.”

Piccard said that the window to reach Hawaii is “a little bit tight” and that “maybe we’ll be a little bit late” before a weather system moves into the plane’s path. The plane’s crew has spent weeks trying to gauge long-range weather forecasts to find a window for the crossing.

With wind and turbulence calmer in the predawn hours of the morning, the Solar Impulse 2 took off in the darkness equipped with full batteries that would recharge as the sun rises over the ocean. The plane has 17,000 solar cells on its wings and a top speed of about 87mph, faster than a ship but much slower than traditional aircraft.

Designed to be lightweight – its carbon-fiber build and lithium batteries weigh little more than two tons, about as much as a car – the plane is threatened by strong winds and bad weather like the driving rains that halted its progress for weeks in Japan.

Borschberg’s home for the next five days will be a 130-cubic-foot cockpit, in which he’ll have to keep the plane gliding as much as possible during the day to save power, guiding it into patches of sunlight and using its motors as little as possible.




Mubadala buys into Trafigura’s Spanish mines as part of new venture For Abu Dhabi's Mubadala, the purchase is part of a push to invest in assets other than

oil. Reuters + NewBase

Trading house Trafigura has sold half of its stake in three Spanish copper and zinc mines to

Abu Dhabi investment company Mubadala as the two firms set up a global joint venture to

invest in base metals mining.

The deal marks yet another move by the Swiss oil-to-metals trader to grow via joint ventures and to raise money via sales of stakes in subsidiaries as an alternative to floating the parent company.

For Mubadala, which was set up in 2002 by the government of Abu Dhabi to help diversify the economy, the purchase is part of a push to invest in assets other than oil. It has a portfolio valued at more than $66 billion.

Mubadala will buy 50 per cent in Trafigura’s mining o perator Minas de Aguas Teñidas (MATSA) which owns the Agua Teñidas, Sotiel and Magdalena mines in southern Spain producing copper, zinc and lead concentrates.

“Investing in MATSA is a key step in growing and

diversifying our existing metals and

mining portfolio,”

Ahmed Yahia Al Idrissi,

chief executive

officer of Mubadala

Technology and Industry, said in a statement. Sources close to the deal said it valued the mines business at around $1.4 billion. Trafigura in the past two years has sold stakes at a large profit in its oil mid-stream business Puma Energy and its U.S. oil storage terminals.

The latest deal with Mubadala follows Trafigura subsidiary Impala in partnership with Mubadala acquiring a controlling stake in the Porto Sudeste iron ore port in Brazil. “This builds on our existing sector strategy and partnership with Mubadala.

We are identifying new opportunities and investing thoughtfully together in ways that complement our existing portfolio,” Trafigura CEO Jeremy Weir said. Trafigura is nearing completion of a two-year investment and expansion plan for MATSA which includes construction of a new treatment plant which will double annual processing capacity to 4.4 million tonnes per year.




Emirates Global Aluminium inks Mining deals with Republic of Guinea Gulf Business + NewBase

Emirates Global Aluminium is currently building a bauxite mine and an aluminium refinery in the West African country. Guinea Alumina Corporation, a wholly owned subsidiary of the UAE’s Emirates Global Aluminium has signed four agreements relating to infrastructure development with the government of the Republic of Guinea.

GAC is building an aluminium refinery and operating bauxite mine in the West African country. The latest agreements are expected to support these initiatives.

Both parties said that they signed deals providing GAC access to the port and rail infrastructure owned by Guinea’s government through the National Agency for Development of Mining Infrastructures (ANAIM) in the region of Boke.

The agreements cover the access conditions and joint investment in the railway and a port operations deal relating to GAC’s investment in the port of Kamsar.

Access rights to the existing infrastructure in the country are included, as well as the development of ”additional infrastructure” in the region of Boke, to support the expansion of GAC’s mining activities.

“This is an important achievement, enabling EGA to secure key upstream capacity to improve security of supply and strengthen our position in the aluminium industry,” said EGA’s executive vice president of supply Masoud Talib Al Ali.

“These agreements further underpin our commitments with our key partners, CBG and the Government of Guinea, to the development of key Guinean and UAE-based industrial complexes.”

EGA, which was formed after a merger of Abu Dhabi’s Emirate Aluminium and Dubai Aluminium, is constructing a two million-tonne per year alumina refinery in Guinea, which is also the world’s top exporter of bauxite.

Under the agreement, bauxite mined by GAC will be ready for export by 2017 and the refinery will be operational by 2022. EGA is also aiming to be the world’s fifth largest aluminium company by output this year and the Guinea project will help it secure raw materials for its plants in the UAE.




Alstom in deal to boost Saudi power infrastructure TradeArabia News Service

Alstom Grid, a global leader in the world of power generation, power transmission, has signed a long-term deal with National Grid SA of Saudi Arabia to develop the electricity infrastructure in the kingdom.

As per the agreement, the two companies will co-operate in fields of standards and

specifications, engineering and design, maintenance and operation, technical exchange forums and technology roadmap. This MOU was signed by Mohammad Al-Rafaa, the engineering vice president of National Grid SA and Michel Augonnet, the senior VP (Commercial

Solutions) Alstom Grid at a ceremony organised at the Alstom Grid Headquarters in Paris. This co-operation between Alstom and National Grid SA includes main equipment such as HV (high voltage) switchgear, power transformers, substation automation solutions including protection and measurement IEDs (intelligent electronic device), digital substation, smart grid and supergrid applications, network management as well as maintenance. Additionally, the deal includes a range of training courses to be conducted by experts from the Alstom Technical Institute, for providing National Grid engineers with the optimum level of technical information adapted to their day-to-day requirements. Alstom is a global leader in the world of power generation, power transmission and rail infrastructure and sets the benchmark for innovative and environmentally friendly technologies. Its unit Alstom Grid has one clear vision: to develop innovative solutions for a flexible, reliable, affordable and sustainable electrical grid, everywhere. "We design, manufacture, install and service the power transmission and distribution products and systems that empower the planet’s low carbon economy... for now and for the future," stated Augonnet. Alstom Grid has over 130 years’ experience and ranks among the top three in the electrical transmission sector with an annual sales turnover of €3.8 billion. National Grid, a limited liability company wholly owned by the Saudi Electricity Company, is responsible for electricity transmission in Saudi Arabia and the operation, control, and maintenance of the electrical grid.




Indian power plants find $19bn of capacity has no takers Bloomberg + NewBase

At a time when almost a third of India’s 1.3bn citizens have no access to electricity, power plants worth about $19bn are struggling to find customers. High interest rates and weak industrial demand have coupled with India’s unusually cool summer and unseasonal rains to curtail electricity usage.

That’s left some 20 gigawatts of capacity – enough to power New Delhi thrice over – without long-term supply contracts, according to Ashok Khurana, director general at the Association of Power Producers, a lobby group based in the capital.

“New plant initiations have come to a grinding halt,” said Debasish Mishra, a senior director at Deloitte Touche Tohmatsu India in Mumbai. “The situation is very discouraging for anyone planning to set up a power plant in India.

If not addressed in time, we will swing from the current surplus situation to a major shortage in a few years.” For JSW Energy, one of the affected power generators, almost half its capacity lacks long-term buyers, said chief executive officer Sanjay Sagar. While Sagar blames tepid power demand on “a downturn in economic activity,” the situation also reveals structural problems afflicting the next link in the chain of India’s power market.




Power plants sell to electricity retailers, preferably on long dated contracts. And the financial health of those retailers, controlled by state governments and forced to supply power to farmers and the poor at subsidised prices, is worsening.

India’s electricity retailers have accumulated losses of Rs2.5tn ($39bn) and lose Rs700bn every year, according to the first-year report card of Prime Minister Narendra Modi’s government. Reviving the distribution companies will be crucial to Modi’s election pledge of providing round-the-clock electricity to every household in the country by 2019.

“That’s the reason why good demand from industrial customers is so critical for distribution companies – because they are the paying customers,” said Khurana. “That demand is missing now.” India’s installed capacity is 272.5 gigawatts, according to the power ministry. It costs roughly Rs60mn to set up a megawatt, said Sambitosh Mohapatra, a partner at PwC India, so 20 gigawatts translates to about $19bn.

India’s electricity supply has improved in the three years since a major power failure darkened vast swathes of the country’s north. And the government has approved investment of Rs1.1tn to upgrade distribution and transmission infrastructure across the nation.

Major Singh, chairman at the power ministry’s Central Electricity Authority, couldn’t be reached on his office phone for a comment. Still, the electricity retailers lose about 1 rupee on every kilowatt hour sold, according to the power producers association. And state governments aren’t always assiduous in making their subsidy payments on time, forcing distributors to cut purchases and forcing outages, said Mohapatra of PwC India.

India’s economic challenges are only bringing the problems out into the open. High borrowing costs have affected purchases of houses, cars and appliances, hurting downstream industries that rely heavily on power such as steel, cement and aluminium. Even after three reductions, the key rate at 7.25% is among the highest in Asia and the growth in power demand has lagged capacity additions in the past year. Steel mills, for example, are operating on average at only 80% of their potential, according to the steel ministry.




UK: Blow to British fracking as drilling plans rejected Agencies + NewBase

Britain's hopes of expanding its shale gas industry suffered a blow Monday when local authorities rejected plans for an exploratory fracking site in northwest England following protests. The application by energy firm Cuadrilla to begin fracking in Lancashire had met fierce resistance

from environmental campaigners and local residents, who cheered Monday's decision when it was announced at a local council meeting. Cuadrilla said it was "surprised and disappointed" and was considering appealing the ruling, which follows the rejection last week of its plans to frack at another site in the area. "We remain committed to the responsible exploration of the huge quantity of natural gas locked up in the shale rock deep underneath Lancashire," the firm said in a statement. Cuadrilla had hoped to drill four wells and undertake exploratory drilling for shale gas at a site in Little Plumpton, a small village close to the coastal town of Blackpool.

But Lancashire county councillors voted against the proposals, on the grounds of their impact on the landscape and noise, despite recommendations by planning officers to approve the plans.

The application, including a 4,000 page environmental statement, had undergone intense scrutiny and public consultation since being submitted more than a year ago. The outcome is a setback for Prime Minister David Cameron's government which has pledged to go "all out for shale", claiming it would increase energy security, keep prices down and create jobs. Cameron hopes to replicate the success of the US fracking industry but has faced opposition protests in many parts of the country. Opponents

fear that the process – which involves pumping water, chemicals and sand at high pressure underground to extract gas – would pollute water supplies, scar the countryside, and trigger earthquakes.




Fracking campaigners outside Preston town hall celebrated in the streets when they heard Monday's decision, chanting "Frack Free Lancashire" and uncorking bottles of champagne. Greenpeace UK energy and climate campaigner Daisy Sands said: "This decision is a Waterloo for the fracking industry and a triumph for local democracy. It's also a huge boost for efforts to kick the UK's addiction to dangerous fossil fuels." Only one shale gas well in Britain has been hydraulically fractured. The Cuadrilla project near Blackpool, northwest England, was abandoned after it triggered an earth tremor that resulted in an 18-month ban on fracking, lifted in 2012. Since then, only three shale gas fracking applications have been made, two by Cuadrilla, which have now been refused, and one by energy company Third Energy. Britain is estimated to have substantial amounts of shale gas trapped in underground rocks and the national government has supported developing these reserves to counter declining North Sea oil and gas output. The country is seen as Europe's main driver for shale gas development after other countries with large resources, such as France and Germany, have banned the technology. Environmental campaigners, who are concerned about hydraulic fracturing, or fracking, contaminating groundwater resources and triggering earth tremors, welcomed the decision. "This decision is a Waterloo for the fracking industry and a triumph for local democracy," said Daisy Sands, Greenpeace UK energy and climate campaigner. The decision weighed on shares of rival IGas which saw its stock trade down 9 percent at 1120 GMT. Shares in Egdon Resources, which has growing shale gas ambitions, were down 4 percent.




China Shale Gas Technology Sees Significant Localisation

China's has achieved significant level of localisation in shale gas exploration technology, according to Li Jinfa, an official with the Ministry of Land and Resources (MLR).

Speaking at the Shale Gas and Ecological Environment Forum held on Sunday, Li said that China has succeeded in indignation of technology such as geophysical, well drilling, fracturing and gas testing, Xinhua Finance reported. He said that this has been made possible because National Development and Reform Commission (NDRC), the Ministry of Finance as well as the National Energy Administration have provided a series of supportive policies for shale gas exploration and development in recent years.

According to statistics from China Geological Survey, China added 106.75 billion cubic meters of proved shale gas reserve in 2014, and total shale gas output hit 1.3 billion cubic meters in the year. China has set ambitious targets for shale gas production. Beijing aims to increase shale gas output to 30 billion cubic meters by 2020, according to Li.

China's Chongqing plans to build shale gas production capacity of 30 billion cubic meters (bcm) by 2020 with an annual output of 20 bcm. Chongqing has been at the forefront of China’s shale gas industry. In July last year, Sinopec’s Fuling field in Chongqing was verified by Chinese government as country’s largest shale gas play. China’s Ministry of Land and Resources verified proven reserves of nearly 107 billion cubic metres (bcm) in the Fuling shale gas field. In October, Sinopec said that cumulative output from its Fuling shale gas project crossed 1 bcm. The government expects country’s shale gas output to hit 6.5 bcm this year.




Russia softens Ukraine gas price stance ahead of talks Reuters + NewBase

Russia proposes keeping the gas price for Ukraine unchanged in the third quarter, Prime Minister Dmitry Medvedev said yesterday, a day before Russia’s energy minister goes to Vienna for gas talks.

“Despite all the difficulties in our current relations with Ukraine, we should within reason make concessions,” Medvedev told Energy Minister Alexander Novak and Gazprom chief executive Alexei Miller. Gazprom had said Ukraine would be charged $287 per 1,000 cubic metres with no discount in the third quarter. That compares to the $247 charged in the second quarter, including a discount of $100 per 1,000 cubic metres. Russia, Ukraine and the European Commission are meeting on June 30 to discuss gas supplies, the day a winter price deal expires. Europe gets around a third of its gas needs from Russia and around a half of that comes via Ukraine. Moscow is under Western sanctions for its role in the crisis there, although the Kremlin denies Western accusations it has supporting the rebels with weapons and troops. Medvedev said that Russia would offer Ukraine a discount of $40 per 1,000 cubic metres of gas in the third quarter and that Russian gas supplies to Europe depend on Ukraine as a transit country.

Gazprom Russia would offer Ukraine a discount of $40 per 1,000 cubic metres of gas in the

third quarter and that Russian gas supplies to Europe depend on Ukraine as a transit country.




Gazprom stopped pumping gas to Ukraine during price disputes in the winters of 2005-2006 and 2008-2009, leading to reduced supplies in European countries that receive Russian gas via pipelines that cross Ukraine. “We cherish (our) reputation as a reliable gas supplier... This (gas discount) is a serious measure to support the Ukrainian economy,” Medvedev said. Gazprom had announced plans to try to bypass Ukraine as a transit country and has said it would redirect flows to the yet-to-be-built Turkish Stream pipeline after its current transit agreement with Kiev expires in 2019. Gazprom has offered to build pipeline extensions to Europe from a new gas hub on the Turkish-Greek border on their own. Europe supports an alternative gas supply route from Azerbaijan. But last week, Miller said that Gazprom was rethinking plans to stop transporting gas to Europe via Ukraine after 2019. “The idea of stopping gas flows via Ukraine after 2019 does not correspond with reality either in terms of costs for new pipelines or in investments needed to upgrade Ukraine’s gas pipeline system,” a European diplomatic source told Reuters. “It will be a huge blow to Gazprom’s reputation worldwide and with the EU in particular if it terminates supplies via Ukraine.” The diplomatic source said there could be discussions on Ukrainian gas transit — which contributes to the country’s budget — in Vienna but that it was not high on the agenda.




Oil Price Drop Special Coverage

Oil holds near 3-wk lows as Greek enters 2nd day of bank shutdown. Reuters + NewBase

Oil futures hovered below three-week lows on Tuesday as investors waited for developments in Greece following a bank shutdown, keeping them away from riskier assets and putting Brent crude on course for a second month of declines.

Brent crude futures were down 9 cents at $61.92 a barrel at 0430 GMT, after falling to $62.01 on Monday, their weakest finish since June 5. The contract is heading for its second straight monthly decline.

U.S. crude dropped 15 cents to $58.18, having closed down $1.30 at $58.33 a barrel, its lowest settlement since June 8. It is set for its first monthly decline in three. "Greece is still the word," said Ben Le Brun, market analyst at OptionsXpress in Sydney. "That story doesn't look like stopping anytime soon."

Tens of thousands of Greeks hit the streets on Monday after waking up to shuttered banks, closed cash machines and a climate of rumours and conspiracy theories following the breakdown in talks between Athens and its creditors.

Any resolution to the crisis is unlikely before a referendum on Greece's bailout is held on Sunday, after Prime Minister Alexis Tsipras announced the vote, wrong-footing European leaders and policy makers.

Investors are also looking at the U.S. government's June payrolls report on Thursday and talks on Iran's disputed nuclear programme going on in Vienna, Le Brun said. The former may reinforce ideas that the U.S. Federal Reserve could raise interest rates as early as September, the first such hike in about 10 years.

The Vienna talks would continue past Tuesday's deadline for a comprehensive agreement intended to open the door to ending sanctions in exchange for limits on Iran's most sensitive nuclear activities for at least a decade, a senior U.S. official said on Tuesday.




Oil Falls for Fifth Day as Iran Nuclear Deal Seen Within Reach Bloomberg

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Oil fell for a fifth day as investors weighed the prospects of Iran increasing crude exports in an oversupplied market.

Futures dropped as much as 0.7 percent in New York. U.S. and European diplomats meeting in Vienna said a path to a comprehensive nuclear accord with Iran can be reached within days as Tuesday’s deadline for an agreement is set to be missed. A measure of volatility in crude trading rose the most since December amid concern financial turmoil in Greece will prompt its exit from the euro area.

Oil is headed for its first monthly decline since March as the Greek debt crisis prompted investors to avoid risky assets, while signs of a global glut persist. Iran, the fifth-largest producer of the Organization of Petroleum Exporting Countries, has estimated it can double exports from about 1 million barrels a day within six months if international sanctions are lifted.

“Global supply is still high so if we see extra oil from Iran, it could be a problem,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “We’ve been quite positive on the price but it could start to look a little bleak, especially if Europe starts to contract again if there’s a contagion affect out of Greece.”

West Texas Intermediate for August delivery lost as much as 39 cents to $57.94 a barrel in electronic trading on the New York Mercantile Exchange and was at $58.17 at 12:32 p.m. Singapore time. The contract decreased $1.30 to $58.33 on Monday. Total volume was about 55 percent below the 100-day average. Prices are down 3.6 percent this month.

The U.S. benchmark crude has advanced 22 percent since the end of March, poised for the first quarterly gain in a year, and is up 9.2 percent in 2015.

Nuclear Discussions

Brent for August settlement slid as much as 30 cents, or 0.5 percent, to $61.71 a barrel on the London-based ICE Futures Europe exchange. Prices have dropped 5.6 percent in June, headed for a second monthly decline. The European marker grade traded at a premium of $3.76 to WTI.

Iran has called for all sanctions, which have reduced its oil exports by half since 2012 and cut it off from the global financial system, to be lifted once a nuclear deal is agreed. The U.S. and its allies want the curbs to be removed in phases as Iran is shown to be implementing any agreement.

“We have made some progress, but still it is not the end of a process,” French Foreign Minister Laurent Fabius said in New York on Monday, before his planned return to the talks. Iran’s top diplomat, Mohammad Javad Zarif, traveled to Tehran on Sunday and is expected to rejoin negotiations Tuesday.

Volatility Index

Also on Tuesday, Greece’s current bailout package will expire, with a $1.7 billion payment due to the International Monetary Fund. The government has imposed capital controls and shut banks, after Prime Minister Alexis Tsipras called for a July 5 referendum on the austerity measures demanded by creditors.




The Chicago Board Options Exchange Crude Oil Volatility Index climbed 16 percent to 33.64 on Monday. The gauge of hedging costs on the U.S. Oil Fund, the biggest exchange-traded fund tracking WTI futures, rebounded from the lowest reading since October.

U.S. crude inventories probably shrank by 2.5 million barrels through June 26, according to the median projection in a Bloomberg survey of nine analysts before an Energy Information Administration report Wednesday. While supplies have decreased the previous eight weeks to 463 million barrels, they’re still 84 million above the five-year average for this time of the year.

Crude stockpiles in Europe’s trading hub expanded to the highest level in data compiled by Genscape Inc. since February 2013, adding to signs that storage space is becoming constrained. Supplies in the Amsterdam, Rotterdam and Antwerp area increased to 60.6 million barrels in the week ended June 19, said the company, which monitors inventories.




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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 30 June 2015 K. Al Awadi

newbase 637 special 30 june 2015

Documents

solar impulse team

pacific crossing

khaled al awadi newbase

moment of truth

solar impulses round

original flight

nights of continuous

weather system