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NewBase 24 June 2015 - Issue No. 633 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE: First Solar wins $200m contract for second phase of Dubai solar park(The Natiopnal + NewBase)
More than 2.3 million solar panels will be installed at a Dubai plant with enough capacity to power up to 30,000 homes, said First Solar, after the US firm announced yesterday that it had won the
contract to supply the ( 200MW ) second phase of the Mohammed bin Rashid Al Maktoum Solar Park.
The solar photovoltaic (PV) park’s operators, the Saudi Arabian firm Acwa Power and Spanish partner TSK, awarded panel manufacturer First Solar an engineering, procurement and construction contract for the 200-megawatt phase believed to be worth US$200 million.
The plant, to be built over an area of almost 4.5 million square metres, will begin operations in two years. January’s winning bid by Acwa and TSK offered the world’s lowest rates for solar PV electricity at 5.84 US cents per kilowatt hour under a 25-year power purchase agreement. Previous lows were at 8 cents per kWh in Brazil and 9 cents per kWh in India.
“This project’s effect on the global energy transition cannot be overstated,” said Ahmed Nada, the First Solar vice president and regional executive for the Middle East. “It has effectively driven down the cost of solar electricity, marking a new milestone in solar PV’s evolution as a mainstream energy resource.”
In 2013, First Solar delivered the Dubai park’s 13MW first phase including the installation of more than 150,000 PV panels. First Solar will also provide panels for the Shams Ma’an plant under construction in Jordan and scheduled for completion in the second half of next year.
The Mohammed bin Rashid Al Maktoum project, owned by Dubai Electricity and Water Authority (Dewa), will provide over 3,000MW of power upon completion, up from its original amount of 1000MW, scheduled for 2030.
The consultancy consortia for the upcoming third phase of the project is expected to be awarded in the next few weeks. The winner will then assess if Dewa should award all of the remaining capacity for the park in one single phase or break it up into sections. A request for bids from companies for the construction of the third phase is expected by the end of the year, says Dewa.
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UAE: Petrofac gains as oil services company reports record $20bn order backlog. The National + NewBase
Shares in Petrofac, a London-listed oil services company with operations in Abu Dhabi and Sharjah, rose sharply yesterday after a bullish trading statement said its order backlog was higher despite the weaker oil price this year. In late afternoon UAE time, the shares were up 50 pence – 5 per cent – at 919.5 pence, although they had been as high as 964.50p during the day.
The company said its order backlog was at a record US$20.5 billion, which included the award this month of a $900 million contract from Petroleum Development Oman to provide engineering, procurement and construction management (EPCM) services for its Yibal Khuff project in southern Oman.
The Oman project was the biggest so far this year out of total new orders for its main EPCM division totalling $4.7bn, the company said. Yibal Khuff is an oilfield located approximately 350 kilometres
south-west of Muscat in the Oman, and the order builds on Petrofac’s award last year of a $1bn contract for the nearby Rabab Harweel oilfield development.
The company also said yesterday that it had made progress on its troubled Laggan-Tormore project in the British sector of the North Sea, although that project has cost it hundreds of millions of dollars and led to two profit warnings this year.
“Putting the challenges we have faced on Laggan-Tormore to one side, the rest of our portfolio continues to perform well,” said Ayman Asfari, Petrofac’s chief executive.
“We have had a good start to the year … Our pipeline of bidding opportunities remains attractive, and ongoing investment by our clients in large strategic projects in our core markets, together with
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our strong competitive position, should see us secure a number of further awards over the second half of the year.”
Indeed, the company said that its net profit should be “significantly weighted” towards the second half of the year. Yesterday’s statement is an update to the market ahead of the firm’s first-half results, which are expected to be released on August 25.
Petrofac’s net profit last year fell 10.6 per cent to $581m on revenue down 1.6 per cent to $6.2bn. This year, Petrofac warned the market that it expected net profit of US$460m because of the fall in prices. That was lower than the previous November forecast of $500m, when oilprices were expected to average $82 per barrel this year.
However, benchmark North Sea Brent oil prices have since bounced back from their lowest levels in January and February, when they were about $45 per barrel, to be trading between US$60 and US$65 per barrel since April.
While the company has been successful at securing new orders, its profitability has been hurt by problems with Laggan-Tormore, a gas plant project on the Shetland Islands, off the UK’s northernmost coast, because of weather delays and other factors.
In April, Petrofac said it would take an additional pre-tax loss of $194.4m on Laggan-Tormore on top of the $230m loss it revealed in February. In yesterday’s trading statement, Petrofac said it expects further “incremental pre-tax costs” for the project to be £30m, with first gas expected in the third quarter of this year.
It said, however, that it has yet to recognise a £20m (Dh115.6m) write-off for its losses against taxes on the project. Some analysts see Petrofac as still vulnerable to further setbacks because of the nature of projects it is exposed to.
Although recognising that Petrofac’s shares have done better than the sector in general, Catharina Hillenbrand-Saponar, an energy analyst at Montpellier Analysis, said: “There is a chance of reversal of performance … [because] it has a good share of risky projects.”
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Qatar Petroleum Eyes Foreign Expansion After Restructuring Bloomberg + NewBaseShare on Tw itter
Qatar Petroleum plans to expand overseas after a restructuring that included the takeover of its foreign investment arm and the firing of some foreign workers.“We are very ambitious internationally,” Saad Sherida al-Kaabi, chief executive officer at the world’s biggest producer of
liquefied natural gas, told reporters Tuesday in Qatar’s capital, Doha. “We are focusing on the upstream business.”
The unspecified job cuts were one part of an eight-month restructuring effort that has seen QP take over Qatar Petroleum International, divest non-energy units including a catering company, and impose stricter conditions on foreign partners.
Since leading Qatar’s transformation into the largest LNG supplier, QP has shifted its priority to managing a slump
in the nation’s oil output while expanding overseas. The change has made the Persian Gulf emirate less attractive to foreign companies seeking to maximize output, according to a June report by Michael Barron, director of global energy at risk consultants Eurasia Group.
“National oil companies are becoming more capable, more financially sound, and they have less need for international oil companies,” Al-Kaabi said. Foreign investors have to “compete harder and offer more to get national oil companies to accept them.” Al-Kaabi said he expects construction of the liquefaction plant in Texas, known as Golden Pass, to begin next year if U.S. regulators approve an export license for the project.
Al-Kaabi, who was appointed CEO in September after eight years as director of oil and gas ventures at QP, said the company is now the “right size” and had to be reorganized to be more efficient after crude prices tumbled almost 50 percent in 2014 amid a global glut.
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Abu Dhabi to host 2nd ‘Eye on Earth Summit 2015’ SG + NewBase
SHEIKH Khalifa bin Zayed Al Nahyan, President of the UAE, continues his royal patronage of the second Eye on Earth Summit, to be held in Abu Dhabi on Oct. 6-8, 2015. The Summit will be the world’s foremost event dedicated to identifying solutions for greater access to and sharing of environmental, social and economic data to address sustainable development.
The Eye on Earth movement, which oversees the Summit, extends the Abu Dhabi Global Environmental Data Initiative’s (AGEDI’s) core mission to facilitate access to quality environmental data that equips policy makers with actionable, timely information to inform and guide critical decisions toward a sustainable future. “Lending our support to international initiatives like Eye on Earth is necessary to help us realise the sustainable development goals globally and locally under the UAE Vision 2021 National Agenda and the Abu Dhabi Environment Policy Agenda,” said HE Razan Khalifa Al Mubarak, Secretary General Environment Agency – Abu Dhabi. “As a catalyzing force for environmental protection, as well as being the lead authority for environmental regulation and control, the Environment Agency Abu Dhabi and our respective divisions must work alongside local and international stakeholders to gain a deeper understanding of our environmental reality,” she added.
Eye on Earth Summit 2015 will cast the spotlight on the role governments, technology, the scientific community and citizen participation play in closing the data gap and enhancing access to quality data. With close to 30 sessions over the course of three days, delegates will learn about the potential for big data to save the planet and
how it can drive the necessary institutional change governments need to make in order to decouple economic growth from the rate of natural resource consumption. Eye on Earth is a collaborative effort between the Environment Agency – Abu Dhabi through the Abu Dhabi Global Environmental Data Initiative (AGEDI), and the Eye on Earth Alliance, a partnership of organizations that aim to build and mobilize global support for access to environmental data. As part of its ongoing expansion, the Alliance has recently grown to include, in addition to the United Nations Environment Program (UNEP), the Group on Earth Observations (GEO), the International Union for Conservation of Nature (IUCN) and the World Resources Institute (WRI).
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Turkmenistan Confident of Selecting TAPI Consortium Leader Sputnik + NewBase
Turkmenistan expects the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline consortium leader to be selected by September, the Central Asian country's ambassador to India told Sputnik Tuesday.
“By September 1, the government of Turkmenistan [is] committed to producing the final results of the selection of a consortium and the leader of the consortium… By the end of the year, you will see a lot of change in this project,” Parahat Durdyev said.
Durdyev said his nation is committed to the TAPI project and seeks to speed up its implementation adding that the project launch is expected to take place in December 2015, while gas deliveries to India via the new pipeline are likely to start in 2018, Sputnik reported. “Turkmenistan can provide energy for India's development and the Indian economy in the future,” Durdyev said. Last year, gas companies of Turkmenistan, Afghanistan, Pakistan, and India established a company that will build, own and operate the planned 1,800-kilometer TAPI natural gas pipeline. The pipeline will export up to 33 billion cubic meters of natural gas a year from Turkmenistan to Afghanistan, Pakistan, and India over 30 years.
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Japan’s SoftBank in $20b solar power venture in India AFP + GulfNews
Japan’s SoftBank will team up with Taiwan’s Foxconn and Bharti Enterprises to invest $20 billion in solar power projects in India, as the country ramps up its clean energy sector, the companies announced Monday. Mobile phone operator SoftBank said the venture aimed to generate 20 gigawatts of energy through solar and wind power plants across coal-reliant India, up from the country’s 4.1 gigawatts of current capacity.
Prime Minister Narendra Modi aims to expand clean energy to 100 gigawatts by 2022 to slash India’s crippling power blackouts as well as bring electricity to the 300 million people currently without power. India relies heavily on polluting coal power plants for about 60 per cent of its electricity.
“With this partnership, our goal is to create a market-leading clean energy company, to fuel India’s growth with clean and renewable sources of energy,” SoftBank’s billionaire founder Masayoshi Son said in a press
release.
Son said his company would help manufacture solar equipment in India for the project, adding that SoftBank has invested $1 billion in the country in the last nine months.
“The sunshine in India is twice that of Japan. Cost of land and labour and maintenance is also half that of Japan. So then, the efficiency of generation solar power is likely to be four times compared to that in Japan,” he also told the CNBC TV18 channel.
Son said the timeline for investments by the venture, a newly formed company called SBG Cleantech, would depend on negotiations with
authorities as well as buying land needed for the power plants.
SoftBank is among companies developing solar plants in Japan in the wake of that country’s Fukushima nuclear power disaster in 2011. Son made the announcement in New Delhi flanked by Sunil Bharti Mittal, chairman of Bharti Enterprises, India’s biggest wireless provider.
Foxconn founder Terry Gou, whose company is best known for manufacturing Apple iPhones, said in the statement his firm was “committed to fulfilling our social and environmental responsibilities”.
Foxconn reportedly started investing in building solar panels several years ago. The falling cost of solar power globally has triggered investment interest in India where Modi has made it a priority.
Modi has insisted that his commitment to ramping up India’s renewable energy supplies is not aimed at “impressing the world” following international pressure to cut greenhouse gas emissions.
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Oil Price Drop Special Coverage
Oil prices up on stronger demand, uncertainty over Iran deal Reyters + NewBase
Oil prices edged higher in Asian trade on Wednesday on hopes for stronger than expected U.S. crude demand, while doubts over the prospect of reaching an agreement next week on Iran's nuclear program eased oversupply concerns.
Brent crude for August delivery had climbed 8 cents to $64.53 a barrel by 2317 ET, after settling up $1.11, or 1.8 percent, in the previous session. U.S. crude for August delivery gained 12 cents to $61.13 a barrel, after rising 63 cents the day before.
"U.S. crude inventories have been at historic highs ... but the thing is crude inventories may have peaked after oil demand picked up in June," said Tony Nunan, oil risk manager at Tokyo's Mitsubishi Corporation.
"$60 a barrel is the new normal for the next several months." Mitsubishi analysts forecast U.S. oil demand would grow by 1.4-1.8 million barrels per day (bpd) in June from the same month last year, Nunan said. U.S. oil demand would rise to 19.41 million bpd this year, up from 19.03 million bpd last year, the U.S. Energy Information Administration said in its short-term energy forecast on June 9.
The American Petroleum Institute (API) forecast on Tuesday that U.S. commercial crude oil stocks fell by 3.2 million barrels last week, larger than analysts' expectations of a 1.5-2.1 million barrel draw and the eighth straight week of declines. The U.S. Energy Information Administration will release official stockpile data later on Wednesday.
"Although crude inventories could cause prices to move higher, we expect to see strong resistance at $61.8 and $65 for West Texas Intermediate and Brent. Therefore, expect prices to remain unchanged," Singapore's Phillip Futures said in a note on Wednesday. Brent-U.S. crude spreads, which have widened to more than $3, could narrow in the short term, depending on how far U.S. inventories fall, the note added. But gains were capped as the dollar hovered at its highest level in over a week against a basket of major currencies following reasonably strong U.S. data on Tuesday. A strong dollar makes commodities, including oil, priced in other currencies more expensive.
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What a Difference a Year Makes as Oil Outlook Turns Upside Down Bloomberg
The oil market’s view of the future has flipped on its head in the past year, as fears of supply disruptions turned into concerns of a glut.
This chart shows the difference one year can make. Last June, crude was above $107 a barrel. Traders were willing to pay $10 more for oil right away than for barrels delivered a year later. Now, with prices swirling around $60, buyers need to get a $3 discount.
“We’ve seen a huge shift since this time last year,” Michael D. Cohen, an analyst at Barclays Plc in New York, said by phone. “The perception now is that stockpiles will continue to grow through the end of the year.”
Investors back then were concerned that Islamic State’s military victories threatened to cut off supply from Iraq and that sanctions on Russia would slow output. Neither of those predictions came true.
Analysts who last June were looking for West Texas Intermediate oil to average $92 three years in the future are now calling for $73.75, according to forecasts compiled by Bloomberg.
“A year ago, everyone was crowded on one side of the boat, myself included,” Michael Corcelli, chief investment officer of hedge fund Alexander Alternative Capital LLC in Miami, said by phone.
Now, while lower prices have slowed the U.S. shale boom, the biggest producers in OPEC are pumping at a record pace. That’s helped keep U.S. awash in oil, with supplies more than 80 million barrels above a year ago.
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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
Khaled Al Awadi is a UAE National with a total of 25 years of experience in the Oil & Gas sector. Currently working as Technical Affairs Specialist for Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy consultation for the GCC area via Hawk Energy Service as a UAE operations base , Most of the experience were spent as the Gas Operations Manager in Emarat , responsible for Emarat Gas Pipeline Network Facility & gas compressor stations . Through the years, he has developed great experiences in the designing & constructing of gas pipelines, gas metering &
regulating stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas transportation, operation & maintenance agreements along with many MOUs for the local authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE and Energy program broadcasted internationally, via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
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