Energy This Week: Dubai solar, Masdar geothermal, LNG strikes

Opec stays positive on oil demand

Opec?continues to be optimistic?on oil demand this year, keeping its forecast for demand growth at 2.4 million barrels per day, and 2.2 million barrels per day for next year. The predicted average of 104.3 million barrels per day in 2024 would be a record and well above previous highs. China, the Middle East, and other Asian countries excluding India are the main contributors to rising consumption, with India, Latin America and Africa also boosting use significantly.

Oil prices accordingly registered a?seventh consecutive weekly gain, and Brent crude has put on 17 per cent over this period, taking it slightly up this year. Chinese demand is strong, and cuts by Opec+ members are having a growing impact. Prices?slipped on Monday, though, with renewed concerns on Chinese growth and a strong dollar. They were?steady on Tuesday, Brent hovering around $86.29 per barrel, as China unexpectedly cut interest rates with weak indications on its property markets, and has officially fallen into deflation. Its sluggish growth is?dragging down material and equipment costs, easing inflationary pressures elsewhere.

Australia, Qatar and the US are the world’s top three liquefied natural gas exporters, and seem like safe, reliable suppliers. But a potential strike in three of Australia’s biggest LNG plants shows how it’s?dangerous to over-rely?on a few critical providers. An important alternative is Oman, which has just signed an agreement to?supply LNG to Germany, as Europe’s largest economy continues efforts to replace lost Russian gas.

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Warning to ships in Hormuz

Ships in the Strait of Hormuz should?stay out of Iranian waters, warns the International Maritime Security Construct, based in Bahrain and backed by the US. Despite a recent deal for the release of Iranian American prisoners in Tehran, there are worries of further attempted seizures of vessels.

The oil has?finally been offloaded?from the dangerous abandoned tanker?FSO Safer?off the coast of Yemen, in a UN-led operation. But with the oil now sitting in a replacement, the 15-year-old?Nautica, a permanent solution is still needed.

Venezuela’s late president Hugo Chavez nationalised ExxonMobil’s fields in the country in 2007. Now, the Texan oil giant has finally been?awarded some compensation?by a World Bank arbitral tribunal, amounting to $77 million. The company had been seeking $1.4 billion, but $907.5 million of this was judged to have been covered by a 2011 award. ConocoPhillips is also seeking damages and could be paid from proceeds of Citgo Petroleum, a formerly Venezuelan-owned, US-based refiner.

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Mixed second-quarter results for Gulf utilities

Dewa reported 4.1 per cent?higher revenue?in the second quarter but 20 per cent lower profits on a year earlier, adding nearly 15,000 customers. Cash flow generation went up more than 18 per cent, and the decrease in earnings was down to higher interest rates and depreciation of new power plants. Abu Dhabi-based Taqa also?saw higher revenue, up 5 per cent, but lower earnings, down 17 per cent, as oil and gas revenue fell while its electricity and water transmission and distribution business expanded.

Private utility Acwa Power, an important regional developer of renewable energy, saw its operating profit for the quarter?up more than 8 per cent?with higher operating rates from existing projects, and the start-up of new ones. It has signed agreements for large new wind farms in Egypt and Kazakhstan.

Lower oil prices?dragged down profits?42 per cent for Sharjah-based Dana Gas. The company has also had to sell condensate locally at lower prices in the Kurdistan Region of Iraq. And Saudi Arabia’s mining champion Ma’aden reported a?91 per cent fall?in second-quarter profits, despite a rise in sales volumes of most products, as prices dropped, and expenses and finance costs rose.

Adnoc’s gas business expansion presses ahead, with the award by?Adnoc Gas?of a?$3.6 billion contract?to a joint venture of National Petroleum Construction Company and Spain’s Tecnicas Reunidas. The work will boost extraction of ethane by 35-40 per cent, as a feedstock for petrochemical industries.

Carbon capture ability not keeping up: Dr Al Jaber

“Our ability to capture carbon is not keeping with the rise in emissions,” Cop28 President-designate Dr Sultan Al Jaber?told the Amazon Summit?in Brazil last Wednesday. Saving the country’s rainforests is a crucial climate and environmental goal, under returned president Luiz Inacio Lula da Silva. On Thursday, meeting in Barbados with the Caribbean trade bloc Caricom, Dr Al Jaber called for?more financial support?for the region, which is exposed to hurricanes and other climatic damage.

Dr Al Jaber then met Jordanian officials, including the ministers of energy, water, and environment, on Tuesday to?discuss cross-border co-operation?on tackling climate change.

The effects of climate change may end up “being more important than everything else”,?says Karin von Hippel, head of the UK’s Royal United Services Institute, the world’s oldest defence and security think tank. “The numbers [of climate migrants] now are nothing compared to what the predictions are in 20 or 30 years, it's quite extraordinary.” Britain will?host the London Energy Security Conference?early next year, intending to refurbish the global energy network, and include major Middle Eastern nations, but not Russia.

The secretary-general of the Environment Agency – Abu Dhabi, Sheikha Al Dhaheri, writes that the?agency is supporting?the country’s goal of carbon neutrality by 2050, reducing the emirate’s greenhouse gas emissions 35 per cent by 2030. The Ministry of Climate Change and Environment will study the effect of?air quality on public health?in the UAE.?Ocean-based solutions?are crucial to tackling climate change, argues Razan Al Mubarak, president of the International Union for Conservation of Nature. Marine ecosystems, such as mangroves, can suck up carbon dioxide, provide a home for fish, and protect coastlines from rising seas.

Abu Dhabi’s?new climate strategy?focuses on cleaner energy sources, especially solar power, to cut emissions by 30 million tonnes by 2027, compared to 135 million tonnes in 2016. Adapting to climate change is the other key pillar of the strategy.

Iraqi environmental activist Wissam Jaafar Radi has launched an app that allows his countrypeople to?report pollution?and launch targeted environmental campaigns. People around the Middle East find ways to cool off, quench their thirst and enjoy themselves in the?continuing heatwave. And the UAE’s Minister of Culture and Youth, Sheikh Salem Al Qassemi,?writes?that those in positions of influence should “govern with the experience of age, but the energy of youth”, and that “there is a time and place for impatience” in young people’s efforts to meet climate challenges.

A group of young people aged from 5 to 22 have?won a court case?in the US state of Montana, claiming an anti-climate state law violated their right to a healthy environment. Although the Republican-dominated legislature is unlikely to change much, the case could support similar litigation elsewhere.

Communities in England can apply for a share of a?￡10 million fund?for local clean energy developments. British low-carbon electricity is held up by local opposition to new power lines.

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Masdar wins Dubai solar bid

The Abu Dhabi-based state green energy developer beat out Saudi Arabia’s Acwa Power in the?race for the sixth phase?of the Mohammed bin Rashid Solar Park, the world’s largest single-site solar facility. Masdar bid 1.62154 US cents per kilowatt-hour to construct the facility, at a cost of $1.4 billion. It will have a capacity of 1,800 megawatts; the park has currently reached 2,427 megawatts of an ultimately planned 5,000 megawatts.

Masdar City has also unveiled the?Gulf’s first geothermal project?in co-operation with Adnoc and Tabreed, using two geothermal wells to drive a cooling system that will meet about 10 per cent of the city’s needs. This innovative system has the advantage of working twenty-four hours round, unlike solar power.

Dubai has 620 electric vehicle charging stations –?here’s where they are. A charge currently costs Dh7.5 (about US$2).

The US has put forward $1.2 billion to fund two pioneering projects which?remove carbon dioxide from the air, one led by Climeworks and the other by Occidental. The technology is crucial for meeting future climate goals.