new base special 26 january 2014

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Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content . Page 1 NewBase 26 January 2014 Khaled Al Awadi NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE High hopes for Masdar go-ahead on Nour 1 solar plant April Yee , http://www.thenational.ae Like a windscreen wiper on steroids, a slim machine whisks across the sand-dusted solar panels and leaves in its wake a sparkling surface ready to absorb the sun’s energy. The cleaning robot – essentially an industrial Roomba, or domestic robot vacuum cleaner, for solar panels in the desert – was being demonstrated to crowds at last week’s World Future Energy Summit as the latest tool in the US solar company SunPower’s arsenal for getting ahead in a long-anticipated bid. Industry insiders are optimistic that in the next few months Abu Dhabi’s Executive Council could give Masdar the green light to build Nour 1, a 100-megawatt photovoltaic plant for which companies first bid in 2011. The wait for the project has gone on so long that Dubai has since stolen the distinction of having the Middle East’s biggest solar panel plant, and companies even began planning for a never- announced successor that they dubbed Nour 2, a natural stepping stone to Abu Dhabi’s ambitious target of sourcing 7 per cent of its power from renewables by 2020. But the delay could work to Abu Dhabi’s advantage thanks to declines in the cost of solar energy: in three years’ time, the cost of the average solar panel has fallen by 60 per cent. “Solar energy is making huge progress, decreasing its costs, increasing its competitiveness, so that market potential for solar is now improving a lot in many countries in the Middle East, potentially in every country in the Middle East,” said Bernard Clement, the senior vice president of new energies for Total, which owns 66 per cent of Sunpower. “Solar projects have one benefit:

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Page 1: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 1

NewBase 26 January 2014 Khaled Al Awadi

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

High hopes for Masdar go-ahead on Nour 1 solar plant April Yee , http://www.thenational.ae

Like a windscreen wiper on steroids, a slim machine whisks across the sand-dusted solar panels and leaves in its wake a sparkling surface ready to absorb the sun’s energy.

The cleaning robot – essentially an industrial Roomba, or domestic robot vacuum cleaner, for solar panels in the desert – was being demonstrated to crowds at last week’s World Future Energy Summit as the latest tool in the US solar company SunPower’s arsenal for getting ahead in a long-anticipated bid.

Industry insiders are optimistic that in the next few months Abu Dhabi’s Executive Council could give Masdar the green light to build Nour 1, a 100-megawatt photovoltaic plant for which companies first bid in 2011.

The wait for the project has gone on so long that Dubai has since stolen the distinction of having the Middle East’s biggest solar panel plant, and companies even began planning for a never-announced successor that they dubbed Nour 2, a natural stepping stone to Abu Dhabi’s ambitious target of sourcing 7 per cent of its power from renewables by 2020.

But the delay could work to Abu Dhabi’s advantage thanks to declines in the cost of solar energy: in three years’ time, the cost of the average solar panel has fallen by 60 per cent.

“Solar energy is making huge progress, decreasing its costs, increasing its competitiveness, so that market potential for solar is now improving a lot in many countries in the Middle East, potentially in every country in the Middle East,” said Bernard Clement, the senior vice president of new energies for Total, which owns 66 per cent of Sunpower. “Solar projects have one benefit:

Page 2: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 2

they are in general easier to develop than, say, oil and gas, so you don’t need a lot of preparation, you just have to be ready from a technical point of view.”

Abu Dhabi has a number of factors to consider, including lessons learnt through a disappointing investment in Solyndra, the US company that filed for bankruptcy in 2011, and delays in bringing online Shams 1, a 100MW solar thermal array. Solar mirrors there generate power by heating oil to make steam to drive electricity turbines rather than by directly producing power as in photovoltaic panels.

Gulf countries seem to have decided to forgo subsidies for renewables and let them compete head to head with natural gas and nuclear, said Joe Kishkill, the chief commercial officer of First Solar, which built Dubai’s 13MW solar panel plant.

“I think we’re close enough on cost today,” he said. “You can install a solar plant just on the amount of liquid fuels you’d save.”

At a logistical level, Abu Dhabi may also need to make sure its power grid is ready to take on new supply, said Mohammed Atif, the area manager for DNV GL’s energy advisory.

“It’s probably more a practical issue,” he said.

“I would suspect what AD is waiting for is it’s waiting for the right time to add that capacity to manage that demand.”

Page 3: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 3

Oman, Spanish firms launch JV for $200m pipeline By Andy Sambidge , http://www.arabianbusiness.com/

Oman Oil Refineries and Petroleum Industries Company (ORPIC) and Spanish company Compania Logistica de Hidrocarburos, have launched a joint venture to build a 280km pipeline project.

The Orpic Logistics Company (OLC) has been established to construct the Muscat-Sohar Product Pipeline (MSPP) which also includes a terminal and a direct pipeline link from Jifnain to Muscat International Airport. A total of $200m will be invested in the project. MSPP will be one of three major projects to be started - the others being the Sohar Refinery Improvement Project and the Liwa Plastics Project, a statement carried by Oman Press Agency said.

"This is a significant project on a number of levels," said Musab al- Mahrouqi, ORPIC CEO. "As a multi-product pipeline it is a first for Oman, a complex transportation system that will have a positive impact for the business overall and specifically in environmental issues.

"The Jifnain terminal is a strategic storage facility, capable of responding to emergency situations should it be necessary. And the direct link to the new airport will mean that aircraft will be refuelled through a closed system, guaranteeing a continuous flow 24 hours a day, rather than having to use fuel tankers.

"We strongly believe that this project is strategically important for Oman." The pipeline will transport four types of fuel, premium and regular gasoline, diesel and jet A1 for aircraft, using a computer controlled buffering system to separate product streams.

He said the project will bring significant

environmental benefits, particularly in Muscat. The new pipeline will reduce traffic on the roads in Muscat and up to the Al Batinah, while tanker numbers will be reduced by 70 percent. OLC is scheduled to complete the pipeline connection between Mina Al Fahal Refinery and the airport in 2016.

Oil Minister H E Dr Mohammed al Rumhi

and CLH chairman José Luis

Page 4: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 4

CLH CREATES A JOINT VENTURE WITH ORPIC FOR THE CONSTRUCTION AND OPERATION OF NEW LOGISTICS INFRASTRUCTURES IN OMAN

Compañía Logística de Hidrocarburos CLH, S.A. has signed an agreement with the Omani company Oman Oil Refineries and Petroleum Industries Company (ORPIC) for creating a joint venture that will invest 200 million dollars in the construction and operation of new logistics infrastructures in Oman. During the contract signing ceremony, which was held today in Muscat, the Chairman of CLH, José Luis López de Silanes, emphasized that "this operation is the first international investment made by the company in its history of more than 85 years and is the result of the company's interest in fostering the internationalisation of its activities, and the prospects for growth of the oil sector in Oman, where CLH has an important reference shareholder to guarantee the success of this project". Musab Al Mahruqi, the CEO of Orpic, said that “this is a significant project on a number of levels. As a multiproduct pipeline it is a first for Oman, a complex transportation system that will have both business and environmental impact. The Jifnain terminal is a national strategic storage facility, capable of responding to emergency situations should it be necessary. And the direct link to the new airport will mean that aircraft will be refueled through a closed system, rather than having to use fuel tankers. We strongly believe that this project is important for Oman and Orpic”. The new company, in which CLH and ORPIC will hold a 40% and 60% stake, respectively, will be called Orpic Logistics Company (OLC) and it will be responsible for the construction and management of a storage plant in the vicinity of Muscat, the capital of Oman, and a multi-product pipeline network that will connect the new storage plant to the two refineries existing in the country and with Muscat International Airport. The new pipeline network will have a total length of 290 kilometres and will make it possible for more than 5.4 million cubic metres to be transported. It will also be reversible, meaning that a highly flexible logistics system will be provided. The development and start-up of the infrastructures will be gradual. The first section of this pipeline network will consist of building the connection between the refinery in Muscat and the international airport, and is expected to become operational during the first half of 2016.

On the other hand, the new storage plant will have an operating capacity of more than 170,000 cubic metres and will be fitted with 18 loading racks for expediting supply to the various distribution companies operating in Oman, and is expected to become operational in the first half of 2017, as is the pipeline for connection with the Sohar refinery. The building of these new infrastructures, in which CLH's broad experience in managing these types of logistics systems will be applied, will bring significant benefits to Oman, as it will permit increased security of oil product supplies and will reduce the use of tank trucks for transporting fuels by road. Besides this, it will mean that the costs of oil product transportation and distribution in the country can be optimised. For CLH, the development of this project represents an important first step in the internationalization process forecast in the Strategic Plan 2012-2016, the aim being to achieve greater diversification of its activities and to develop new business opportunities. CLH AND ORPIC Compañía Logística de Hidrocarburos CLH is the leading company in the Spanish market for the transportation and storage of oil products, with a pipeline network more than 4,000 kilometres long, and 39 storage facilities, with a total capacity of 7.9 million cubic metres, in addition to 28 airport facilities. ORPIC (Oman Oil Refineries and Petroleum Industries Company) is one of the leading companies in Oman and has two refineries in that country, in Sohar and Muscat. ORPIC is owned by the Government of the Sultanate of Oman and Oman Oil Company SAOC, the trading company created by the Government of the Sultanate of Oman for managing investments in the energy sector. This latter company has also been a CLH shareholder since 2003 and

holds a 10% stake in the capital.

Page 5: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 5

ChemaWEyaat and Indorama sign for Madeenat Aromatics project http://www.2b1stconsulting.com/chemaweyaat-and-indorama-sign-for-madeenat-aromatics-project/

The Thai chemical company Indorama Ventures (Indorama) and the local Abu Dhabi National Chemicals Corporation (ChemaWEyaat) signed an agreement to establish the joint venture Abu Dhabi Chemicals Integration Company (Tacaamol) to design and build the first phase of the Madeenat ChemaWEyaat Al Gharbia (MCAG) project in the Western Region of Abu Dhabi, along the boarder of Saudi Arabia.

For some years, the Emirates of Abu Dhabi is working to balance its upstream activities with the added value generated by the downstream sector in expanding its petrochemicals capacities.

In 2008, Abu Dhabi Emir established ChemaWEyaat as a joint venture between Abu Dhabi National Oil Company (ADNOC), the Abu Dhabi Investment Council and the International Petroleum Investment Company (IPIC) in order to channelize the best resources from the upstream side toward the petrochemical sector.

At that time Abu Dhabi was targeting to invest up to $25 billion capital expenditure in the giant Madeenat ChemaWEyaat Al-Gharbia Master Planning project.

As Tacaamol means integration, Abu Dhabi has conceived the Madeenat ChemaWEyaat Al-Gharbia Master Planning project as an integrated petrochemical complex similar to Sadara in Saudi Arabia.

If integration favors the process optimization and related costs, it also adds complexity in the design and construction pushing forward the expected date of first production.

So ADNOC and IPIC decided to split the Madeenat ChemaWEyaat Al-Gharbia Master Planning project in three phases.

As a first phase, the Madeenat ChemaWEyaat Al-Gharbia (MCAG) project should require $10 billion capital expenditure.

This first phase MCAG will itself be also phased up in a manageable way and in respect with the different partnerships required by ChemaWEyaat to licence the best processes with international chemical companies.

In that respect the agreement signed between Indorama and ChemaWEyaat to create the joint venture Tacaamol is providing the first stone to the MCAG project.

Page 6: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 6

Foster Wheeler won PMC for Tacaamol Aromatics http://www.2b1stconsulting.com/

In this Tacaamol joint venture, ChemaWEyaat and Indorama will share the working interests such as:

- ChemaWEyaat 51% is the operator

- Indorama 49%

For this first phase of the MCAG project, ChemaWEyaat and Indorama intends to build through their Tacaamol joint venture an aromatics plant including:

- 1.4 million tonnes per year (t/y of paraxylene (PX) - 500,000 t/y of benzene. - Petrochemicals tank farm - Export jetty

In 2012, ChemaWEyaat had selected Foster Wheeler to provide the project management consultancy (PMC) services for the MCAG project.

In September 2013, ChemaWEyaat had mandated CH2M Hill to carry out the front end engineering and design (FEED) work of the Madeenat ChemaWEyaat Al-Gharbia project.

With Indorama joint venture, ChemaWEyaat is partnering with a polyester global leader producing PET and PTA all over the world.

ChemaWEyaat and Indorama are planning to invest $1 billion capital expenditure in this Tacaamol Aromatics project as a first phase of the Madeenat ChemaWEyaat Al-Gharbia (MCAG) project to come on stream in 2020 .

Page 7: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 7

Sarir oilfield attacked, power lines cut http://www.libyaherald.com/ By Jamal Adel.

The Sarir oilfield was attacked by an armed group this evening and, during clashes with army units guarding the field, a main power line connecting the Sarir power station to a number of towns and cities was cut.

Heavy weaponry was used in the attack and missiles were fired into the oilfield, Saleh Mohammed, commanding officer for the army’s 25th Brigade, which is responsible for guarding a number of facilities in the region, told the Libya Herald.

He said that no oil tanks were hit in the clashes, during which army troops were able to repel the attackers, but that a main power line was cut. This line, he said, carried power into the national grid, connecting the Sarir power plant with Benghazi and a number of towns including Kufra and Jalo.

The attack is thought to have been part of ongoing clashes in the region between the Zwai and Tebu tribes. These have been destabilising the area and led, on Monday, to workers evacuating the Sarir power plant, leading to its temporary closure.

Earlier today, Fraj Bu-Jufool, the head of the self-named ‘Operation Room for the Liberation of the South’ – an armed group from the local Zawi tribe – announced that he, along with another group called 427 Brigade, had liberated the Sarir and Messla oilfields.

This was denied by spokespersons for the army units at the two oilfields. It now appears that when Bu-Jufool made the announcement, his forces were actually preparing for this evening’s attack.

It is believed that the attackers were from the same armed group which attacked Sarir farm – an agricultural project north of Kufra – on 21 December.

Page 8: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 8

Kuwait's refineries still not at full production http://www.tradearabia.com/news/OGN_250529.html

The largest of Kuwait's three oil refineries was fully operational on Friday after a power cut shut all of them in the

week, but the other two are still not at full production, a spokesman said.

The 460,000-barrels-per-day (bpd) Mina Ahmadi refinery was working at 100 per cent early on Friday, a spokesman

for the Kuwait National Petroleum Company (KNPC) said. The 270,000-bpd Mina Abdullah and 200,000-bpd

Shuaiba refineries were working at around 60 per cent and are expected to be fully operational by Saturday, the

spokesman added.

The three refineries, built next to each other on the Gulf coast south of the capital, were shut down by a power outage

on Wednesday and have been slowly restarted by KNPC. OPEC member Kuwait has been using its reserves to

prevent a disruption to exports. Power cuts often occur in Kuwait because of its outdated and unstable electricity

supply system.

Kuwait's Mina Al Ahmadi refinery

Page 9: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 9

UK Offshore oil and gas licensing round begins by PERRY GOURLEY , http://www.scotsman.com/business/energy/

THE UK government has launched the latest licensing round for drilling for offshore oil and gas amid what

it described as “high interest” from companies in exploring. Ministers said around 20 billion barrels of oil

could still be buried in the seabed and that applications by explorers under the round will help unlock its

economic potential.

Page 10: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 10

A record number of licences were awarded in the previous round, including 21 new entrants, taking the total number of companies working in the North Sea to 50. Energy minister Michael Fallon said: “This new round of drilling for offshore oil and gas will help boost growth, energy security and jobs in the UK. The licensing of new areas forms an essential part of our long term economic plan by enabling the exploration necessary to ensure we fully realise our remaining reserves.”

Last year, 36 offshore projects were approved under the previous round. Applications for the 28th licensing round have to be submitted by 25 April. The government said after reviewing the conclusions of an environmental report, a number of blocks in the deepest waters off the south-west of England are currently not being offered as part of the round because of lack of data over the marine environment there .

A number of blocks excluded from earlier licensing rounds, including ones in the Moray Firth, have again been omitted for environmental reasons. UK oil and gas output has been in steady decline since production peaked around the turn of the century and the government is speeding up its planning regime to help oil and gas companies extract resources left below the seabed.

Announcing the licensing round, the government highlighted the contribution of oil and gas industry to the economy. The offshore projects approved last year generated around £6.5 billion in tax revenue and another £5bn through taxes on the wider supply chain, the government said. The sector also employs roughly 350,000 people, of which 45 per cent are in Scotland. Current forecasts for the next five years show a need for an additional 15,000 employees.

But WWF Scotland director Lang Banks said: “Given all the tax breaks provided for decommissioning old rigs and encouraging exploration in once-unviable areas, it’s hardly surprising that there’s so much interest by companies in even more oil and gas drilling in the North Sea. “However, given the urgent need to reduce our climate emissions, we urgently need to see ministers set out a clear plan to move us away from fossil fuels.”

The government is also counting on vast onshore shale gas resources to help stem the UK’s growing dependence on energy imports and boost government coffers. The UK’s next onshore licensing round, which includes shale gas, is expected to be launched in early summer.

Page 11: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 11

World buyers line up to buy U.S. natural gas REUTERS :- BY OLEG VUKMANOVIC AND EDWARD MCALLISTER

Countries across the world have been quietly signing deals in recent months to import natural gas from the United States, revealing a growing appetite for the fuel overseas as domestic output soars.

Up to a dozen long-term deals, each worth billions of dollars, have been penned behind closed doors with companies in China, Japan, Taiwan, Spain, France and Chile as global demand spikes, according to company, industry and trade sources. Through the agreements, China in particular has emerged as one of the biggest beneficiaries of cheap American natural gas that in the coming years will be piped to Gulf Coast plants and liquefied for shipment abroad in tankers.

The unannounced deals, which amount to about 2 percent of daily U.S. supply, are not the first of their kind, and they depend on U.S. government approval to construct two new liquefied natural gas (LNG) plants. But the number of new buyers, and their global scope, show how the United States is taking steps to becoming a major export hub by stealing ahead of rivals in Australia and East Africa, successfully wooing needy Asian buyers even before projects begin construction. Global competition may squeeze profit margins on some exports of U.S. gas.

Companies like Britain's BP (BP.L) and France's GDF Suez (GSZ.PA), already committed to taking LNG from the United States, are now finding multiple buyers willing to take tranches of supply. "As we see more contracts getting signed, it's an indication that the U.S. has really cheap natural gas that will help supply the global market," said Jason Bordoff, Director at the Center on Global Energy Policy at Columbia University.

The United States is producing record amounts of natural gas thanks to a drilling boom, and more than a dozen export projects have been proposed. But large domestic users of natural gas such as the petrochemical industry are worried that unfettered exports could push prices higher at home. The Obama administration has been approving exports on a case-by-case basis. So far, only four projects are allowed to export across the globe and only one is under construction.

Page 12: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 12

Cheniere Energy's (LNG.A) Sabine Pass project in Louisiana, expected to begin shipments late in 2015, has sealed deals with importers in Europe and Asia over the past two years. This latest batch of gas sales will be exported from Sempra Energy's (SRE.N) Cameron LNG plant in Louisiana and the Freeport LNG plant in Texas, sources said. Both plants are expected to begin operations by the end of the decade, pending approvals.

Sempra is still waiting on permits to construct the Cameron plant, and to export the gas to countries with which the U.S. does not have a free trade agreement. Freeport has full export approval, but is yet to begin construction.

THE DEALS

Securing buyers early can make or break an LNG project. Without buyers, a project will not receive financial backing or be built. GDF Suez, which acquired export rights at Cameron last year, has agreed to sell all of its 4 million tonnes per year of capacity to buyers in Japan, Taiwan, China and Chile, according to a review of deals confirmed by industry sources.

Japan's Mitsubishi (8058.T) and Mitsui (8031.T), also with export rights at Cameron, have separately targeted major buyers such as Spain's Repsol (REP.MC), France's Total (TOTF.PA) and Japanese utilities. Mitsubishi is to sell a significant chunk of LNG to its own trading arm in Singapore. Sources said Japanese buyers were reluctant to commit to large deals while the fate of its nuclear fleet remained uncertain after the 2011 Fukushima disaster. Mitsubishi is also in talks with Indian Oil Corp. (IOC.NS) to sell 1 mtpa of LNG for its planned terminal at Ennore in southern India, a company executive said. Exact volumes may be adjusted.

Sempra hopes to make a final investment decision to build the Cameron plant later this year. Once that decision is made, the deals agreed by GDF Suez, Mitsui and Mitsubishi automatically become formal sales agreements, industry sources said. The San Diego-based company expects to win export approval from the U.S. Department of Energy before April.

Meanwhile, BP is in talks to export LNG from the Freeport plant to China National Offshore Oil Corporation (CNOOC), giving the British company a foothold in the world's largest energy consumer. This

Page 13: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 13

and older deals with other exporters will soon make China one of the largest importers of U.S. gas. BP has a further deal to supply Japanese utility Tepco with 0.5 mtpa, sources said. BP declined to comment. Mitsui and its prospective Japanese utility customers Kansai Electric and Tohoku Electric also declined comment.

More than 12 million tonnes per year (mtpa) of LNG would be exported from the United States under the deals, or around 1.5 billion cubic feet per day of gas, though some volumes may alter in final negotiations, sources said. U.S. daily production is about 70 billion cubic feet.

"These deals will send a signal that there is still strong demand for U.S. LNG volumes," said Andres Rojas, analyst at Waterborne Energy in Houston. GDF was also in talks with Thailand's PTT but these were abandoned after a failure to agree terms last year, a senior PTT source said. Mitsui also broke off talks with South Korean importer GS Caltex, a source at the company said.

HARD SELL

Despite these recent deals, sellers have found it harder than expected to find new buyers, and have had to offer favorable terms when they do. A projected LNG supply spike between 2016-2020 from North America, Australia, east Africa, Russia and Asia has empowered buyers to push down the price of long-term deals being negotiated now.

This is partly reflected in the low profit margins U.S. exporters stand to make from many of the recently concluded agreements. "The United States is not the only gas producer, so we are competing in a market

Page 14: New base special  26 january 2014

Copyright © 2014 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced,

redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavours have been used to ensure the accuracy of the information contained

in this publication. However, no warranty is given to the accuracy of its content . Page 14

with countries like Qatar, Malaysia, Australia and potentially East Africa," Bordoff said. "There is not infinite demand. There is only so much supply that the global market can take."

In its first long-term LNG deal into Asia, GDF Suez is selling 0.8 mtpa to Taiwan's CPC from 2018 at barely breakeven levels. According to the price formula reviewed by sources, CPC will pay around $12 per million British thermal units for the gas in the first year of the contract, a steep discount to the $16 its pays for LNG prices in Asia linked to oil.

Moreover, America's edge over rivals could easily dim should domestic gas prices rise nearer to pre-shale boom levels and crude oil prices simultaneously drop to around $80 a barrel. At those levels, LNG deals linked to oil begin to look globally competitive, handicapping buyers of American gas.

Bearing these risks in mind, buyers nevertheless want limited exposure to U.S. LNG primarily as a way of negotiating down prices in oil-indexed, long-term contracts with Qatar and Australia.

Commenrtary – Expert , Sustained Growth in Liquefied Latural Gas Over the past two decades, liquefied natural gas (LNG) has emerged as an increasingly core feature of the global gas balance, with growth of about 7% per year since 2000. Its contribution to meeting demand for gas has risen steadily to reach nearly 10% of aggregate gas supply in 2012. This represents production of 240 million tonnes (Mt) (source: CERA). As the distances between major gas-producing and consuming regions increase, this boom is set to continue in a very significant manner. By 2020, output is forecast to reach 373 Mt, and LNG should account for 13% of global gas supply.

In contrast, LNG played only a marginal role in the gas balance of the North American market in 2012. The import volume of 18.6 Mt of LNG accounted for less than 2% of the aggregate gas demand of this huge market (source: CEDIGAZ and GIIGNL). The recent advent of large-scale shale gas production has offset the sharp decline in conventional gas output, sharply curbing import requirements. This scenario is likely to remain unchanged ten years from now: LNG imports are estimated at a mere 5 Mt.

Page 15: New base special  26 january 2014

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Khaled Malallah Al Awadi, MSc. & BSc. Mechanical Engineering (HON), USA ASME member since 1995 Emarat member since 1990

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[email protected] [email protected]

Khaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 yearsKhaled Al Awadi is a UAE National with a total of 24 years of experience in theof experience in theof experience in theof experience in the Oil & Gas sector. Currently working as Oil & Gas sector. Currently working as Oil & Gas sector. Currently working as Oil & Gas sector. Currently working as

Technical Affairs Specialist fTechnical Affairs Specialist fTechnical Affairs Specialist fTechnical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for or Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for or Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for or 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 the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations 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 Manager in Emarat , responsible for Manager in Emarat , responsible for Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developed Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developed Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developed Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years , he has developed

great experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructinggreat experiences in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of supply of gas pipelines, gas metering & regulating stations and in the engineering of supply of gas pipelines, gas metering & regulating stations and in the engineering of supply of gas pipelines, gas metering & regulating stations and in the engineering of supply

routes. Many yearoutes. Many yearoutes. Many yearoutes. Many years were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs for rs were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs for rs were spent drafting, & compiling gas transportation , operation & maintenance agreements along with many MOUs for rs 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 andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE andthe local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcasted Energy program broadcasted Energy program broadcasted Energy program broadcasted

iiiinternationally , via GCC leading satellitenternationally , via GCC leading satellitenternationally , via GCC leading satellitenternationally , via GCC leading satellite ChannelsChannelsChannelsChannels . . . .

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NewBase 26 January 2014 K. Al Awadi

Camels pass Crain oil drill in India 2012