Greetings Hawk Energy NewBase 25 October 2024 Energy News issue - 1756
Saudi Arabia signs energy deals worth $27.69bn
Saudi Arabia signed 107 strategic agreements and memorandums of understanding to strengthen its global leadership in the energy sector, involving 117 public and private entities, reported SPA.
The agreements, valued at SAR104 billion ($27.69 billion), were inaugurated by Minister of Energy Prince Abdulaziz bin Salman bin Abdulaziz at the Energy Localization Forum, titled "Resilient Energy: Enabling Energy Sector Capability and Sustainability."
The signing ceremony was attended by Minister of State Dr Hamad bin Mohammed Al Sheikh and Minister of Industry and Mineral Resources Bandar bin Ibrahim AlKhorayef. The event was attended by various ministers, CEOs from Saudi and international private sectors, specialists and experts in the energy sector, decision-makers, investors, and international partners. In his speech, Prince Abdulaziz welcomed the attendees and emphasized that Saudi Vision 2030 has made localization a cornerstone for ensuring the sustainability and security of the future of energy. He noted that energy in Saudi Arabia is not merely a sector but a driving force for industry and development, contributing significantly to economic growth. He stated that macroeconomic impact of the entire energy sector is estimated to represent 40 per cent of the Kingdom’s GDP, underlining the importance of localizing energy to inspire similar initiatives in other sectors of the Saudi economy.
He also highlighted localization programs, including Aramco's In-Kingdom Total Value Add , and the Saudi Electricity Company's Bina program.
He further explained that the Covid-19 pandemic exposed vulnerabilities in supply chains, affecting essential commodities and increasing the risks associated with reliance on external sources.
This prompted Saudi Arabia to take a swift action, coordinating the local production of vital supplies in cooperation with 15 key entities. He emphasized that the pandemic underscored the importance of localization across all sectors, particularly in energy.
The Minister also referred to the directives from Crown Prince and Prime Minister Mohammed bin Salman bin Abdulaziz Al Saud to address these challenges, including a directive to prepare a comprehensive study on bridging gaps in supply chains.
He highlighted the efforts of the Energy Sector Localization Committee, which has set short and long-term goals and strategic enablers to achieve the goal of localizing 75 per cent of the sector by 2030.
"Our comprehensive strategy focuses on localization rather than just settling for local content" said the Minister.
"We are taking an all-inclusive approach to localize the entire supply chain, from raw materials to the final product, with the goal of maximizing its local value. Our ambition is to transfer technology and products to the Kingdom, encompassing the entire supply chain," he added.
UAE” Tesla and UAEV receive first independent EV charging permits in Dubai
The Dubai Electricity and Water Authority has granted its first two independent electric vehicle charge point operator licences to UAEV, a state-backed electric vehicle charging company, and Texas-based EV manufacturer Tesla.
The permits were granted under Dewa’s newly launched regulatory and licensing framework that is aimed at developing a robust EV charging network to meet the city’s growing demand.
The initiative, unveiled during Gitex Global 2024 in Dubai, is aimed at supporting the emirate's sustainability goals and its target of achieving net-zero carbon emissions by 2050.
Dewa's new framework "furthers the collaboration between the public and private sectors”, managing director and chief executive Saeed Al Tayer said.
“It addresses the rising demand for more EV charging stations according to the highest global standards, to keep pace with the increase in electric vehicles in Dubai and the UAE.”
The regulatory and licensing framework is designed to address current and future EV demand, reduce emissions and encourage investment in green infrastructure in Dubai, while maintaining safety and efficiency, the utility said.
The number of EVs on Dubai roads reached 25,929 at the end of December 2023, from 15,100 a year earlier, Dewa said in February.
By 2030, EVs are expected to have a market share of more than 15 per cent (nearly 58,000 vehicles) of new passenger car and light commercial vehicle sales in the UAE, according to a report released by PwC in June. By 2035, the share is projected to increase to 25 per cent, around 110,500 vehicles. Currently, EVs represent only 3 per cent of all vehicles sold in the UAE, the report said.
The report found that a major obstacle to widespread adoption of EVs in the UAE and globally is concern about being able to find vehicle charging points on lengthy journeys, dubbed as “range anxiety” by automotive analysts. There are nearly 2,000 public charge points throughout the UAE, according to PwC.
The UAE government plans to increase the share of electric and hybrid vehicles to 50 per cent of total vehicles on roads by 2050.
“To achieve this goal, UAEV is committed to promoting green transportation by expanding the national infrastructure for charging electric vehicles across the Emirates,” said Sharif Al Olama, undersecretary for energy and petroleum affairs at the Ministry of Energy and Infrastructure, and UAEV’s chairman.
The new licence will help “us achieve our mission of decarbonising the transport sector and making EVs more appealing to consumers”, Mr Al Olama said.
Pakistan: OGDCL starts production at Baloch-2 exploration well
Further to disclosure on August 30, 2024, regarding the gas condensate discovery at Baloch-2 in Sembar formation, OGDCL has announced the well has now been brought into production in Sinjhoro block.
The Company's in-house expertise was key in delineating, drilling, and testing the structure. Drilled to a depth of 3,920 meters, the well is currently producing 350 barrels per day (BPD) of oil and 5 million standard cubic feet per day (MMSCFD) of gas. The production is connected to the Sinjhoro Processing Plant, with gas being injected into the SSGCL network.
The venture is a collaboration between OGDCL (76% Working Interest), Orient Petroleum Inc. (19%), and GHPL (5%). The well is located in Sanghar district, Sindh province.
OGDCL is focused on fast-tracking exploration, drilling, and production to enhance national energy security and contribute to Pakistan's sustainable development.
OGDCL being the national flagship of the Country's E&P sector is making all out efforts to play a pivotal role in enhancing the energy security of Pakistan. In this context, the Company during July 2022 June 2023 contributed around 46%, 29% and 36% towards Country’s total oil, natural gas and LPG production respectively.
US: Exxon & Qatar get 3-year extension to build their LNG plant
Federal regulators on Thursday gave an Exxon Mobil (XOM.N), opens new tab and Qatar Energy LNG joint venture a 3-year extension to finish building their Golden Pass LNG plant, a regulatory document showed.
The extension was granted due to delays caused when lead construction contractor Zachry Holdings filed for bankruptcy in March, according to a Federal Energy Regulatory Commision filing.
The project, at the Sabine Pass site of a former gas-import terminal that was converted to process natural gas for LNG exports, is one of two large U.S. LNG facilities whose startups were expected to significantly expand supplies from the world's top exporter of the superchilled fuel in the next 12 months.
The project's original main contractor, Zachry Holdings filed for Chapter 11 bankruptcy protection, saying the Golden Pass project - known as GPX - was at least $2.4 billion over the original budget.
Golden Pass is yet to announce a new EPC contractor and has been in negotiations with McDermott International (MCDIF.PK), opens new tab to be the lead contractor on the project.
Russia’s Arctic shipping route runs into problems
Russia is facing a deficit of ice-class cargo vessels for its gigantic Northern Sea Route project as the nation cannot build the fleet on its own, according to Deputy Prime Minister Yury Trutnev.
Russian shipyards have the capacity to construct only 16 more Arctic cargo vessels by 2030 out of at least 70 needed, Trutnev, who also represents the Kremlin in the nation’s Far East, said at a governmental meeting on Arctic development held this week.
In addition, high borrowing costs for domestic projects to build ice-breakers are making Russia’s tariffs for vessel escort across the Northern Sea Route uncompetitive, he said.
All these issues are hampering Russia’s Arctic ambitions just as “a whole range of countries are increasingly more interested in unimpeded transportation along the conduit,” Trutnev said.
The Northern Sea Route stretches some 5,600 kilometers along Russia’s coast between Norway and Alaska, offering a shorter passage to Asia than the Suez Canal. As navigation through the icy waters is becoming easier amid climate change, Russia has been implementing its plan to boost Arctic cargo flows to as much as 220 million tons a year by 2035, mainly thanks to new oil and gas projects.
However, western sanction imposed after the Kremlin’s invasion in Ukraine have slowed down Russia’s Arctic greenfields and restricted the nation’s access to foreign shipyards, limiting its options for seaborne exports, especially in winter when conventional vessels can’t cross the conduit.
As a result, Russia now projects the total 2024 cargo flows via the Northern Sea Route at around 40 million tons, only a half of the original target.
“Further growth of shipments via the Northern Sea Route depends both on availability of ice-class tankers and progress at the Arctic projects,” said Viktor Kurilov, senior oil markets analyst at consultant Rystad Energy A/S.Russia has as many as 100 ice-class vessels able to carry Arctic cargoes, according to estimates from Moscow-based consultancy Yakov and Partners.
However, only 27 of these ships — including 15 LNG tankers, seven oil tankers and five container ships — are of the Arc6 or Arc7 class that allows year-round navigation through thicker winter ice, according to Valdis Plyavinsh, an expert at Yakov and Partner’s analytical center.
Russia’s original Arctic development plan envisioned two projects - Rosneft PJSC’s Vostok Oil and the Arctic LNG 2 plant led by Novatek PJSC - providing the bulk of new cargo volumes for the Northern Sea Route through 2035.
However, western sanctions prevented Arctic LNG 2 from receiving ice-class vessels it ordered in South Korea. The Russian Zvezda shipyard has already launched at least three out of 15 LNG carriers for the project but so far only one of them has signaled readiness for sea tests. Originally, Zvezda was supposed to provide the first tanker to Arctic LNG 2 in March 2023.
Rosneft’s Vostok Oil greenfield was set to add as much as 30 million tons of new cargo flows for the Arctic route this year, yet oil output at the project is still at the test stage.
“The onshore shipment network for Vostok Oil has not been completed, construction of the fleet for the project hasn’t even started,” said Mikhail Grigoriev, director of Gecon consultancy and an invited expert on Russia’s State Council commission on Arctic development.
Rosneft, Zvezda, Novatek and Arctic LNG 2 didn’t respond to Bloomberg requests for comments on the progress of their projects and expansion of their ice-class fleet.
Oil heads for weekly gain as M.East tensions keep market on edge
Oil prices nudged higher on Friday and are on track for a weekly gain of more than 1%, as tensions in the world's top oil-producing region, the Middle East, and a restart in Gaza ceasefire talks in the coming days kept traders on edge.
Brent crude futures climbed 18 cents, or 0.2%, to $74.56 a barrel by 0342 GMT while U.S. West Texas Intermediate crude was at $70.34 a barrel, up 15 cents, or 0.2%.
"We remain of the view that the right price for crude oil currently is around $70 where it is now, as we await fresh price drivers, including the outcome of China's NPC Standing Committee meeting as well as Israel's response to Iran's October 1 missile attack," IG market analyst Tony Sycamore said in a note, referring to WTI prices.
Both benchmarks settled down 58 cents a barrel in the previous session after prices fluctuated against expectations of heightened or reduced tensions in the Middle East.
Oil traders are waiting for Israel's response to a missile attack by Iran on Oct. 1 that may involve hitting Tehran's oil infrastructure and disrupt supplies, although reports said Israel would strike Iranian military, not nuclear or oil, targets.
U.S. and Israeli officials are set to restart talks for a ceasefire and the release of hostages in Gaza in the coming days. Previous attempts to reach a deal have failed.
U.S. Secretary of State Antony Blinken said on Thursday that the United States does not want a protracted Israeli campaign in Lebanon, while France has called for a ceasefire and focus on diplomacy.
Ceasefire talks have a small net negative impact on oil prices, Sycamore said, adding the focus is more on the conflict in Lebanon and Israel's potential response to Iran.
