Mark Latham Commodity Equity Intelligence Service

Friday 4th September 2015
Background Stories on www.commodityintelligence.com

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    Macro

    German factory orders dwindle to lowest level in six months


    Germany’s factory orders fell at the fastest rate for six months in July, figures released on Friday showed.

    According to the Destatis federal statistical office, factory orders declined 1.4% month-on-month in July, recording the biggest drop since falling 2.6% in January.

    The figure was well short of the expected 0.6% increase, which still would have represented a slowdown from the 1.8% increase in June.

    The report said domestic orders rose 4.1%, while foreign orders slumped 5.2% month-on-month. Orders received from Eurozone countries climbed 2.2%, while orders from other countries plunged 9.5%.

    - See more at: http://www.digitallook.com/news/international-economic/german-factory-orders-dwindle-to-lowest-level-in-six-months--853407.html#sthash.M5srFsU0.dpuf
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    Iran’s top leader says no nuclear deal unless sanctions are lifted

    Iran’s top leader says no nuclear deal unless sanctions are lifted

    Iran’s supreme leader says world powers must lift international sanctions and not merely suspend them as part of a landmark nuclear agreement.

    Speaking to a group of clerics, Ayatollah Ali Khamenei said “there will be no deal” if the sanctions are not lifted. His remarks were read by a state TV anchorman.

    Khamenei says some US officials have spoken of the “suspension” of the sanctions, which he says is unacceptable. He says Iran will only partially comply with its commitments if the sanctions are merely suspended.

    US President Barack Obama recently secured enough support to prevent the Republican-led Congress from blocking the deal.

    The agreement would curb Iran’s nuclear activities in return for sanctions relief.

    https://www.energyvoice.com/other-news/86737/irans-top-leader-says-no-nuclear-deal-unless-sanctions-are-lifted/
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    Alcoa plans new R&D center for advanced 3D printing processes


    Metals company Alcoa Inc said on Thursday it will invest $60 million to expand its research and development center in Pennsylvania to explore ways to make 3D printing viable on an industrial scale to produce parts for the aerospace, automotive and construction sectors.

    The move is part of New York-based Alcoa's strategy of investing in more advanced aerospace and automotive products while selling off some of its more traditional yet costly smelting facilities.

    Also known as additive printing, 3D printers build three-dimensional metal parts by layering and heating metal alloy powder, which are then treated in a forge to make them stronger.

    The 3D process has been used to build prototypes for 25 years, but only now is making its way into regular production.

    Alcoa's chief technology officer, Ray Kilmer, said the current available alloys are expensive, and part of the focus of the expanded R&D center will be to explore new aluminum, titanium, nickel and other metal alloys.

    "The (alloy) powders need to be improved upon, they need to be cost effective, and they need to work better in the additive printing process," Kilmer said. "What's new now is the machines are getting better, faster and cheaper. Alcoa is stepping into the process so we can get the performance and the cost to where they need to be."

    Kilmer said additive printing could be used to manufacture anything from fasteners to wheels and jet engine turbine blades. The R&D center would also look at different additive printing technologies and ways to reduce the waste of costly metal alloys that occurs in traditional manufacturing processes.

    Construction on the new facility is due to be completed in the first quarter of 2016.

    Proponents of 3D printing say it can help aircraft manufacturers cut the cost of parts made from titanium, which costs seven times more than aluminum.

    Norwegian titanium component manufacturer Norsk Titanium AS recently announced plans to establish the world's first industrial-scale 3D printing facility in the United States.

    U.S. conglomerate General Electric Co has said it will introduce its first 3D-printed parts in an aircraft engine platform in 2016, saying that the lighter and simpler parts will improve engine performance.

    http://www.reuters.com/article/2015/09/03/metals-alcoa-idUSL1N1181N620150903

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    Judge orders U.S. SEC to expedite resource extraction rule


    A federal judge has ordered the U.S. Securities and Exchange Commission to fast-track a final rule requiring oil, gas and mining companies to disclose payments to foreign governments, after a human rights group complained the regulator was dragging its feet.

    In a Sept. 2 ruling, Judge Denise J. Casper for the U.S. District Court for the District of Massachusetts handed Oxfam America a major victory, and told the SEC it will get 30 days to file an "expedited schedule" with the court for how it plans to finalize the rule.

    "The SEC is now more than four years past the deadline set by Congress for the promulgation of the final rule," Casper wrote in her decision.

    "The court concludes...that the SEC's delay in promulgating the final extractive payments disclosure rule can be considered unlawfully withheld."

    Oxfam has been among one of the most vocal supporters of the resource extraction rule, saying it will play a crucial role in helping combat corruption in resource-rich countries.

    Required by the 2010 Dodd-Frank Wall Street reform law, the rule calls for oil, gas and mining companies to disclose how much they pay governments in taxes, royalties and other types of fees for exploration, extraction and other activities.

    The SEC did complete work on the rule in August 2012, a few months after Oxfam first sued the SEC over delays. But the non-stop litigation surrounding the rule did not end after the SEC adopted it.

    Trade groups including the Chamber of Commerce and the American Petroleum Institute filed a lawsuit accusing the SEC of conducting a flawed analysis of the rule's costs to the industry. In 2013, a federal judge tossed the rule out, saying it was "arbitrary and capricious."

    http://www.reuters.com/article/2015/09/03/sec-court-rule-idUSL1N1191S020150903
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    CDS Rates and the Killing Zone.

    Image title
    Glencore.
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    Teck
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    Petrobras.
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    Gazprom
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    Oil and Gas

    Aramco Cuts All October Crude Pricing to U.S., Northwest Europe


    Saudi Arabia, the world’s largest crude exporter, cut pricing for all October oil sales to the U.S. and Northwest Europe and reduced the premium on its main Light grade to Asia by 30 cents a barrel.

    State-owned Saudi Arabian Oil Co. cut its official selling price for October sales to Asia of Arab Light crude to 10 cents a barrel more than the regional benchmark, the company said in an e-mailed statement. The discount for Medium grade crude for buyers in Asia widened 50 cents to $1.30 a barrel less than the benchmark.

    Brent, a global oil benchmark, fell almost 50 percent last year as Saudi Arabia and other OPEC members chose to protect market share over cutting output to boost prices. Brent fell from over $100 a barrel in July 2014 to less than half that six months later. It traded at about $50 on Thursday.

    The Organization of Petroleum Exporting Countries led by Saudi Arabia decided on June 5 to keep its production target unchanged to force higher-cost producers such as U.S. shale companies to cut back. The producer group has exceeded its target of 30 million barrels a day since May 2014.

    Saudi Arabia reduced production in August to 10.5 million barrels a day, the first decline this year, according to data compiled by Bloomberg.

    Middle Eastern producers are competing increasingly with cargoes from Latin America, North Africa and Russia for buyers in Asia. Producers in the Persian Gulf region sell mostly under long-term contracts to refiners. Most of the Gulf’s state oil companies price their crude at a premium or discount to a benchmark. For Asia the benchmark is the average of Oman and Dubai oil grades.

    http://www.bloomberg.com/news/articles/2015-09-03/aramco-cuts-all-october-crude-pricing-to-u-s-northwest-europe
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    OPEC oil output in Aug falls from record on Iraq disruption - survey


    OPEC oil output fell in August from the highest monthly level in recent history, a Reuters survey found on Wednesday, as disruptions to flows on Iraq's northern pipeline halted supply growth from the group's second-largest producer.

    Largely stable output from Saudi Arabia and other Gulf members of the Organization of the Petroleum Exporting Countries indicated they are not wavering in their focus on defending market share instead of prices.

    OPEC supply fell in August to 31.71 million barrels per day (bpd) from a revised 31.88 million bpd in July, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants.

    Oil LCOc1 has weakened due to surging output and is trading below $50, not far from a more than six-year low close to $42 reached last month. OPEC's shift to the market-share strategy in 2014, led by Saudi Arabia, deepened the decline.

    Despite calls from some members for an emergency meeting, even OPEC delegates who favour supply cuts do not expect any to be agreed, leaving a surplus which OPEC's own numbers indicate is at least 2 million bpd on the market.

    "I really see no chance for holding a meeting before the scheduled Dec. 4 meeting, which will reach no concrete agreement to drastically cut production," said a delegate from one of OPEC's African members.

    "We know that the present oversupply is more than 2 million barrels per day."

    The decline in OPEC output from July's level was the first since February based on Reuters surveys. Even so, OPEC has boosted production by almost 1.5 million bpd since the November 2014 switch in policy to defend market share.

    July's output from OPEC's current 12 members was revised lower but is still the highest since Reuters records began in 1997. OPEC output was above 32 million bpd in 2008 until Indonesia left the group at the end of the year.

    The biggest drop in August came from Iraq, one of the main drivers of the rise in OPEC output this year.

    Exports from southern Iraq edged about 40,000 bpd lower to just above 3 million bpd, according to Iraqi officials and shipping data seen by Reuters.

    Shipments from Iraq's north via Ceyhan in Turkey by Iraq's State Oil Marketing Organisation and the Kurdistan Regional Government posted a larger fall because of halts in the flow along the pipeline from Iraq, shipping data showed. 

    Top exporter Saudi Arabia kept output largely stable in August, sources in the survey said, following a decline in July. There was no significant change in the other major Gulf producers, Kuwait and the United Arab Emirates.

    Nigerian exports rose in August according to loading schedules, although Royal Dutch Shell said on Aug. 27 it shut two pipelines and declared force majeure on Bonny crude exports, which could have a larger impact in September.

    Algeria posted a small increase after starting production at two fields and output in Iran, eager to reclaim its traditional spot as OPEC's second-largest producer if and when sanctions are lifted, also edged up slightly.

    Libyan production declined in August. Supply remains disrupted by unrest and negotiations to reopen closed oil facilities have yet to succeed.

    http://uk.reuters.com/article/2015/09/02/uk-opec-oil-idUKKCN0R21QV20150902

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    WoodMac: LNG projects pushed ahead despite oversupply


    Wood Mackenzie said that despite the outlook for global LNG demand looking increasingly subdued, the number of LNG projects proposed to take a final investment decision in 2015 and 2016 has not reduced significantly, in contrast to the 45 upstream oil & gas projects which have postponed FID so far in 2015.

    Wood Mackenzie says in its new global gas analysis that if there are no postponements the market could see an additional 100 million tonnes per annum of LNG sanctioned in the next 6-18 months, extending the likelihood of an oversupply of LNG in Asia to 2025.

    Noel Tomnay, Vice President Global Gas & LNG Research for Wood Mackenzie says: “With the LNG market facing a wall of new supply just as China’s gas demand growth has faltered, it is surprising how few new projects chasing a final investment decision have been postponed.”

    Tomnay said that global LNG supply is presently around 250 million tonnes per annum and there is a further 140 mmtpa under construction. “Recognising that the global market will struggle to absorb such a large supply uptick, for some time now we’ve been forecasting a soft global market. However that bearish prognosis is now being exacerbated by a demand downturn,” he added.

    Wood Mackenzie points to Asia and China, in particular, as being key to its revised outlook. Tomnay elaborates: “China’s LNG import commitments are set to rise by 17% year-on-year between 2015 and 2020, from 20 to 41 mmtpa but China will struggle to take all this LNG so quickly. In contrast, China’s LNG imports fell by almost 4% yoy in the first half of 2015, as a consequence of subdued industrial output and fuel competition, which was driven by relatively low-priced oil.”

    The outlook for longer term incremental LNG demand growth in China is also being negatively affected. And with lower industrial output and power generation competition increasingly characterising other key Asian LNG markets, like South Korea, Asian buyers are not in a hurry to finalise new LNG contracts, adds Tomnay. Wood Mackenzie’s view remains that the market opportunity for new LNG into Asia does not open up significantly until after 2022, with the key implication being that new project FIDs are not required until 2017 at the earliest.

    The question remains whether companies are reassessing investment decisions on LNG projects in light of reduced demand. Tomnay points to an example from February this year: “Recognising this oversupply BG deferred its proposed US LNG export project at Lake Charles. But BG’s postponement has been an exception.”

    Wood Mackenzie says that thus far most companies are continuing to push ahead with their new LNG projects. “Major project operators including Shell, Petronas, Eni, Anadarko, BP, ExxonMobil and Woodside maintain that their projects will take FID before the end of 2016,” Tomnay qualifies.

    WoodMac poses a question why haven’t more companies followed BG’s suit if the market is unlikely to be able to absorb new LNG in the medium to long term? Tomnay explains some of the drivers behind the decision to press ahead: “Postponement could invalidate contracts for the portion of project LNG sold so far, and jeopardise hard-won stakeholder support, including from local communities. Some developers may be worried that a loss of momentum could favour their competitors and that a project postponement may be tantamount to a cancellation.”

    Wood Mackenzie warns that if company statements are to be believed we will see FID on some 50 mmtpa of LNG from the US and a further 50 mmtpa from outside the US within the next 6-18 months. “Development of even half of this proposed supply could prolong the Asian oversupply to 2025. Wood Mackenzie’s view is that the global LNG market does not need all this LNG at the pace proposed and, as companies confront this reality, a raft of project postponements will follow,”Tomnay offers in closing.

    http://www.lngworldnews.com/woodmac-lng-projects-pushed-ahead-despite-oversupply/

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    China's CNOOC offers two Oct-Nov cargoes in first LNG supply tender


    China National Offshore Oil Corp, the country's largest LNG buyer, has issued its first LNG supply tender, offering two cargoes for loading over October and November from the BG-operated Queensland Curtis LNG export plant in Gladstone, Australia, market sources said Thursday.

    The sell tender -- widely regarded to be the first issued by a buyer in northeast Asia -- highlighted a radical shift to the supply and demand balance in the LNG industry, which has seen the Platts JKM fall from an historic high of $20.20/MMBtu in February 2014 to $7.50/MMBtu Thursday.

    "CNOOC is snowed under with cargoes due to tepid downstream demand," one northeast Asian buyer said.

    "Buyers are already struggling to absorb all the additional contract volumes that are coming to the market," another buyer said.

    CNOOC offered the first cargo on an FOB basis for loading October 19-23, and the second cargo on a DES basis for loading November 18-19.

    Interest in the tender would likely be limited, sources said, given weak demand in the Asia-Pacific region and the lean specification of the cargoes.

    CNOOC was also planning to offer an additional two cargoes for loading in 2016 and an unspecified number of cargoes for loading from 2017 onward, all from QCLNG, they said.

    The state-owned buyer has a 50% equity interest in QCLNG Train 1 and a contract with BG Group for the procurement of 5 million mt/year of LNG from the seller's portfolio.

    http://www.platts.com/latest-news/natural-gas/singapore/chinas-cnooc-offers-two-oct-nov-cargoes-in-first-26199422

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    Excelerate halts US LNG export project


    Excelerate Energy has ended its LNG export project in south Texas because of falling oil prices and other economic factors.

    Texas-based Excelerate today asked the US Federal Energy Regulatory Commission (FERC) to withdraw its application to build a floating LNG export project in Lavaca Bay, Texas, making it the first company to halt its FERC proceedings for US LNG exports.

    It is unclear if Excelerate is the first company to stop development of a US LNG export project because of low oil prices, as a number of other proposed projects have not entered the expensive FERC construction approval process and have not announced any progress since oil prices started to plummet last summer. Dozens of projects have applied to export up to 48 Bcf/d ofn natural gas from the contiguous US, far more than the market will support.

    "Following an internal evaluation of the economic value of the project, Excelerate has determined that it will no longer pursue the project proceedings in the captioned dockets," Excelerate said in a letter to FERC today.

    Excelerate in December asked FERC to suspend its review of the project, saying, "Recent global economic conditions — including, among other things, a steep decrease in the price of oil — have created uncertainty regarding the economics of the project."

    Excelerate, which pioneered the development of onboard LNG regasification vessels, did not return an Argus inquiry seeking additional comment.

    The company told Argus in June 2014 that it had spent about $50mn in the FERC approval process and expected to spend more.

    The economics of US export projects are based on a large differential between domestic gas prices and global oil prices, as most long-term LNG contracts to Asia are linked to oil prices at an indexation rate of about 15pc. That means at oil prices of $100/barrel, the delivered price to Asia oil-linked contracts would be about $15/mmBtu, but at oil prices of $50/barrel the oil linked price falls to about $7.50/bl.

    http://www.argusmedia.com/News/Article?id=1097475
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    Shell and BG mega-merger faces regulatory delay


    The £47billion mega-merger between oil giants Shell and BG Group faces regulatory delay after authorities in Australia deferred a decision to let the deal go ahead.

    Shell said it was “working closely” with the Australian competition regulator after the watchdog delayed a critical decision on clearance for the deal, signalling it has reservations about the potential impact on gas supply.

    The deferral of the decision until September 17 leaves the clearance from the Australian Competition and Consumer Commission as one of three key approvals still outstanding, alongside China and the UK.

    The Australian and Chinese approvals are seen as raising the most vexing competition issues.

    The proposed mega-merger, which got the green light from the European Commission on Wednesday, has raised worries among industrial energy users along the east coast of Australia that the availability and choice of gas supplies will be further restricted.

    Prices for local consumers are already increasing sharply, partly because so much gas is set to be shipped from Queensland to Asia as LNG.

    UK-based BG owns the massive Queensland Curtis LNG project, which started exports early this year, while Shell owns 50% of the Arrow Energy venture, the holder of the largest chunk of known, undeveloped gas reserves on the east coast.

    In a letter to interested parties in June, the ACCC focused on the potential impact of the takeover on the wholesale supply of gas in eastern Australia.

    It asked how closely Arrow and BG competed with each other and others on gas supply and whether buyers believed a combined Shell-BG would change incentives to supply gas to domestic rather than export customers.

    A Shell spokesman said the group was informed late on Wednesday by the delay in the decision from September 3 to September 17.
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    Rosneft sells 15% stake in Vankor to India's ONGC


    Rosneft has agreed to sell 15 per cent of Vankor, one of its largest oilfields, to India's ONGC.

    The Russian state-controlled oil group has been courting Asian investors as it struggles under the burden of hefty debts and falling oil prices, writes the FT's Jack Farchy.

    Discussions with ONGC, India's state oil company, over Vankor began last year.

    Vankor is one of the jewels in Rosneft's crown, producing 22m tonnes of oil last year to make it the company's third-largest production subsidiary. The Russian state-controlled oil company is also working to expand it by developing a cluster of nearby fields that could more than double overall production.

    The price of the deal was not disclosed. Bloomberg last month reported that ONGC was seeking to pay $900m for a stake in Vankor, though it did not say what size of stake was under discussion.

    Rosneft has also been discussing the sale of a stake in Vankor to China's CNPC since last year. However, a deal has not yet been concluded as falling oil prices and western sanctions against the Russian group complicate negotiations.

    Commenting on the deal, which was signed on the sidelines of the Eastern Economic Forum in Vladivostok, Igor Sechin, Rosneft chief executive, said:

    Collaboration in such a large-scale project will allow establishinga brand new level of strategic cooperation between Rosneft and ONGC Videsh. This will accelerate the development of our partnership, in other large-scale oil and gas upstream projects in the region.

    http://www.ft.com/fastft/386941/rosneft-sells-15-stake-vankor-indias-ongc

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    Santos auction faces challenge in volatile oil market


    As rollercoaster oil prices roil markets, Australian oil and gas producer Santos Ltd faces a tough task to raise the $2 billion it needs from asset sales to slash its debt and avoid having to swamp the market with new shares.

    Santos put its assets up for sale just over a week ago, desperate to rescue its stock from a 15-year low due to sliding oil prices and worries it will sell new shares to cut A$8.8 billion ($6.2 billion) in net debt.

    The company, which has stakes in oil and gas production in Australia, Papua New Guinea, Indonesia and Vietnam, said it had already been approached with offers and would consider any other proposals over coming months.

    Santos faces having to give up the jewel in the crown - its 13.5 percent stake in Papua New Guinea LNG, sell off a string of assets, or resort to a share sale to raise the A$3 billion that investors believe it needs.

    "It's going to be a tough call for that board room," said a banker in Singapore pitching for work with potential bidders.

    Bankers and analysts say a full takeover offer for Santos, which has a market value around A$4.5 billion, is unlikely as bidders would be deterred by its 30 percent stake in the nearly completed Gladstone liquefied natural gas (GLNG) project.

    http://in.reuters.com/article/2015/09/03/santos-ltd-ma-idINL4N1181FD20150903
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    Canacol Negotiates New Gas Sales as It Triples Colombia Output

    Canacol Negotiates New Gas Sales as It Triples Colombia Output

    Canacol Energy Ltd., a natural gas explorer in Colombia, is negotiating new supply deals as it steps up drilling and expects to more than triple gas production in the Andean country by year-end.

    The producer is on track to increase gas output to about 90 million cubic feet a day in December to meet existing contracts, up from about 25 million now, Chief Executive Officer Charle Gamba said in an interview. The company is in talks to supply a further 25 million daily cubic feet.

    “We are currently working on a number of smaller contracts that we hope to bring on stream early next year,” Gamba said in a telephone interview from Bogota Wednesday. “We are hoping that we can produce right to our productive capacity, which will be 120 million cubic feet.”

    Canacol has risen 14 percent in Bogota this year, making it the top performer on Colombia’s Colcap index and one of only two to post a gain. The Andean nation’s two largest oil producers -- state-run Ecopetrol SA and Pacific Exploration and Production Corp. -- are among the worst performers.

    Canacol plans to add two more wells at its Clarinete discovery by December, further increasing productive capacity by approximately 35 million cubic feet a day, Gamba said.

    Colombian demand for gas is starting to outstrip supply, especially on the Caribbean coast, amid economic growth and fast declining production at aging fields operated by Chevron Corp. in partnership with Ecopetrol.

    “It translates into a very strong pricing environment for local gas producers,” Gamba said. “That puts us in a very unique position. Because those fields dominated the supply of gas to the coast for 25 years, nobody has really been exploring around there.”

    Gas prices in Colombia are $4 to $8 per million British thermal units at the wellhead, more than double prices in North America, Gamba said.

    Canacol has partnered with drilling services company Perfolat de Mexico to participate in Mexican bidding rounds. Officials there have eased several key components of its energy auction to encourage greater interest, in response to the tepid participation for the country’s first private auction earlier this summer.

    http://www.bloomberg.com/news/articles/2015-09-03/canacol-negotiates-new-gas-sales-as-it-triples-colombia-output
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    Shell keen to lease Indian west coast strategic oil storage


    Royal Dutch Shell is in talks to lease India's new strategic oil caverns at Mangalore on the country's southwest coast, two sources said, giving it increased storage in a market where oil demand is increasing.

    A decision on the Mangalore site, which has total capacity of around 11 million barrels of oil, depends on Shell winning relief from local sales tax, the sources said, while commissioning has been pushed back by two months to December.

    India, the world's No.4 crude consumer and one of the few major economies which is still seeing strong demand growth, is building up strategic petroleum reserves (SPR) facilities at three locations in the country's south that will hold a total 36.87 million barrels of oil, enough to cover almost two weeks of its needs.

    Under the proposal, Shell would use the Mangalore site for commercial storage, but in the event of an emergency would have to make supplies available to state-run refiners and keep the site filled at specified levels.

    Shell would likely store oil grades used by a nearby 300,000 barrels per day (bpd) refinery owned by the state's Mangalore Refineries and Petrochemical Ltd (MRPL), the sources with direct knowledge of the matter said.

    "It will be like a commercial storage for Shell, but in case of emergency the supplies will have to be made available to MRPL or any other (state-run) refiner," said one of the sources.

    No decision had been made as to the origin of the oil to fill the facility, but it would most likely come from Africa where producers are looking for new buyers in the wake of the U.S. shale oil boom.

    MRPL currentlly buys an average 2 million barrel of sweet African grades every month from spot markets.

    The government expected to resolve the local tax issue, if a leasing deal was reached, the sources said.

    Shell and Indian Strategic Petroleum Reserves Ltd (ISPRL), which is building the cavern, declined to comment.

    ISPRL chief executive Rajan K. Pillai said the start-up of Mangalore's SPR, as well as sites at Padur further to the south, would be pushed back to December because of a delay in pipeline connections between the port and the storage sites.

    Mangalore needed about 3 kms (1.9 miles) of pipelines, Pillai said. Padur, which has four divisions of about 4.6 million barrels each, lacked some 34 kms (21 miles) of pipeline.

    India, the world's No.4 oil consumer, relies heavily on fuel imports, producing less than a third of its overall demand.

    http://www.reuters.com/article/2015/09/03/india-oil-shell-idUSL4N1174UD20150903
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    Canadian Oil Sands project to operate at ‘minimal’ rates until end of the month


    Canadian Oil Sands, the main owner of the giant Syncrude oil sands project in Alberta, said the venture won’t return to normal operations until at least the end of the month.

    The project, the largest synthetic crude oil processing facility in Canada, was affected by a fire over the weekend. The incident, still under investigation, forced the company to halt productionat the 326,000 barrel-per-day mining and upgrading project.

    Canadian Oil Sands said the project will operate with “minimal synthetic crude oil shipments and operating rates” for the next two weeks as part of a phased recovery.

    “Affected units are planned to be subsequently restored to operation, with a return to more normal production rates anticipated towards the end of September,” it said.

    The disruption means that Syncrude output this year will be “near the low end” of the current 96 million to 107 million barrel range for the year, the company said


    COS confirmed the fire had destroyed “pipes, power and communication lines on a pipe rack between a hydrotreating unit and its associated amine unit.” However, it also said the incident did not cause damage to mining and extraction operations or other major upgrading units.

    http://www.mining.com/canadian-oil-sands-project-to-operate-at-minimal-rates-until-end-of-the-month/?utm_source=twitterfeed&utm_medium=twitter

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    Alternative Energy

    Japan: Solar reaches 10% of peak summer power


    Solar power generation made up some 10% of the peak summer electricity supplies of Japan’s nine major utilities, the Ashai newspaper reported on Thursday.

    While solar power contributes only about 2% of annual power generation in the country, sunny skies throughout the summer increased power output, generating a total of some 15 GW of power in early August.

    Japan has invested billions of dollars in renewable energy since 2012, when it introduced a feed-in tariff (FIT) program in an effort to reduce its reliance on nuclear power in the wake of the 2011 Fukushima catastrophe.

    According to the Asahi report, the ratio of solar power at peak hours ranged from 5.9% at the Hokuriku Electric Power utility to as high as 24.6% at Kyushu Electric Power.

    Installed solar capacity benefitting from the country’s FIT scheme reached more than 24 GW at the end of April, according to government data, up from about 5 GW before the program was launched.

    Read more: http://www.pv-magazine.com/news/details/beitrag/japan–solar-reaches-10-of-peak-summer-power_100020920/#ixzz3kjWmuLyn

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    Apple just signed a patent for a battery that could last weeks


    Apple has filed a renewed patent for a fuel cell battery that could power its devices "for days or even weeks", a potential step on the way to ending battery life issues.

    The patent application, published by the US Patent and Trademark Office, describes a "portable and cost-effective fuel cell system for a portable computing device" that could use a number of different energy sources to provide long-term power.

    Filing the new patent is probably a routine legal procedure, rather than suggesting any imminent application of the idea. Apple filed patents on the same subject several years ago, and often patents ideas that do not end up in their products.

    While the new patent application, which suggests a number of different energy sources from sodium borohydride to liquid hydrogen, varies little from its previous filings, its renewal could suggest that Apple is still interested in the idea.

    The filing says fuel cells "can potentially enable continued operation of portable electronic devices for days or even weeks without refueling".



    Read more: http://www.businessinsider.com/apple-just-signed-a-patent-for-a-battery-that-could-last-weeks-2015-9#ixzz3kkI4pobS

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    Uranium

    German plan to close nuclear loophole a blow to utilities


    Germany’s government is attempting to change the law with regard to nuclear liability in order to fund its phasing out of the sector, and it’s a move which could prove to be hugely expensive to the country’s utilities.

    The government wants to close a legal loophole to prevent utilities from evading a $45bn payment to fund the country's nuclear exit, a copy of the draft law seen by Reuters shows.

    E.ON, which has announced plans to spin-off its ailing power plants, threatened legal action on Wednesday if the revision of the law goes ahead.

    "Should (the draft) be passed in its current form, we would likely have to take legal action," a spokesman for E.ON said in emailed comments to Reuters.

    The current law states energy companies are only liable for spun off companies for five years. The revised law will make them liable for the costs of shutting down and decommissioning power plants, as well as disposing of nuclear waste, for as long as it takes, even if they spin off subsidiaries that own the nuclear entities.

    "The five-year period is by far too short. Dismantling a nuclear plant alone usually takes about 20 years," the text of the draft law said. It foresees extending liability until the point at which remaining nuclear waste has been sealed.

    Germany's "big four" utilities, E.ON, RWE, EnBW and Vattenfall, have set aside a combined EUR38.5bn to cover the dismantling of their nuclear plants. But there has been concern that they might break up to avoid paying for dismantling the plants - the last of which will be shut for good in 2022 - and the revised law aims to prevent the costs falling on the taxpayer.

    Relevant government ministries approved the plans on Wednesday with few changes and the Cabinet will now discuss it, an economy ministry spokeswoman said.

    http://www.powerengineeringint.com/articles/2015/09/german-plan-to-close-nuclear-loophole-a-blow-to-utilities.html?hootPostID=fd5bbf20762fcf845914dfac3d816933
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    Fission Uranium sees low cost Saskatchewan mine


    Fission Uranium Corp's preliminary economic assessment for its wholly-owned high-grade Triple R deposit at its Patterson Lake South property envisages a open pit–underground mine for an estimated capital outlay of $1.1 billion producing more than 100 million pounds of yellowcake over 14 years.

    Fission estimates the hybrid approach utilizing a dyke system will result in operating expenditure of $14.02 per pound U3O8 over the life of mine, making Triple R potentially one of the lowest cost uranium producers in the world.

    Spot uranium prices – usually much lower than long-term contract pricing which is the norm in the industry – were last assessed at $36.70. Fission's PEA assumes a long term price of $65 a pound for gross revenues over the life of the mine of $7.7 billion and net revenues of $7.1 billion after provincial royalties and transportation charges.

    The $294 million company based in Kelowna, BC in July announced a proposed merger with Denision Mines to combine the richest uranium properties in the region on par with with the high-grade unconformity giants McArthur River, Cigar Lake and Phoenix.

    http://www.mining.com/fission-uranium-sees-7-billion-saskatchewan-mine/

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    Agriculture

    Wheat sinks to fresh multiyear lows; corn, soy weak


    U.S. wheat futures sank to multiyear lows on Thursday, weighed down by ample supplies and weak demand for U.S. exports, traders said.

    A hefty supply base also sparked a sell-off in corn, which hit its lowest level since mid-June, while soybeans sagged on technical selling and rising harvest expectations.

    The Chicago Board of Trade reported heavy deliveries against expiring wheat and corn contracts on Wednesday evening, reflecting the easy availability of supplies on the cash market.

    K.C. hard red winter wheat fell to its lowest price since April 4, 2007, during Thursday's trading session while CBOT soft red winter wheat hits its lowest level since June 30, 2010.

    Export demand has picked up as prices have fallen but U.S. supplies remain uncompetitive on the global market.

    Egypt's government buyer is holding an import tender on Thursday and traders are waiting to see if Black Sea origins continue their clean sweep of sales this season. There was no U.S. wheat offered for sale in the deal.

    "No matter what the price, it seems like the U.S. can't do much in terms of export business," said Mike Krueger, president of the Money Farm, a grain market advisory service near Fargo, North Dakota. "You have everyone running for cover."

    CBOT December soft red winter wheat was down 11-1/4 cents at $4.67-3/4 a bushel at 11:02 a.m. CDT (1602 GMT) while K.C. December hard red winter wheat dropped 6-1/2 cents to $4.68-1/4 a bushel. Both contracts set fresh lows on Thursday.

    The U.S. Agriculture Department on Thursday morning said weekly export sales of wheat for 2015/16 shipment totalled 277,500 tonnes, near the low end of expectations.

    CBOT December corn was down 5-1/2 cents at $3.62 a bushel while CBOT November soybeans were off 2-3/4 cents at $8.71-1/4 a bushel.

    Forecasts for good weather that will help shepherd both corn and soybean crops toward maturity around the U.S. Midwest have bolstered harvest expectations.

    Private analytics firm Informa Economics raised its projections for corn and soybeans on Thursday, the third closely watched company to issue a robust harvest outlook this week.

    "Grain markets are moving lower with wheat prices down on ample world supply, while corn and soy face the prospect of the imminent start to the U.S. harvest," said Paul Deane, senior agricultural economist at ANZ Bank.

    http://www.reuters.com/article/2015/09/03/markets-grains-idUSL5N1193PR20150903

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    Crops in India in Dire Need of Rain as El Nino Hurts Monsoon


    Rice, soybean and corn crops in India urgently need rainfall as the strongest El Nino in almost two-decades parches vast tracts of farm land.

    Parts of the southern, central and western regions are facing moisture stress and need widespread rains in the next two weeks to salvage crops, according to J.S. Sandhu, a deputy director general at the state-run Indian Council of Agricultural Research in New Delhi. That may prove elusive as the monsoon begins to retreat from the north of the country this week, according to the state forecaster.

    “Domestic food inflation overall will rise as there will be upward pressure on food prices because of lower rainfall,” Faiyaz Hudani, associate vice president at Kotak Commodity Services Pvt., said from Mumbai on Sept. 2.
    “The only thing that’s good for India now is the declining global prices of commodities, especially edible oils and the whole oilseeds complex.”

    India is poised to import record amounts of palm oil after prices in Kuala Lumpur plunged to a six-year low last month and as a domestic cooking oil shortage widens. Food costs tracked by the United Nations fell for a ninth month in July, the longest slump in more than a decade.

    “There’s an overall rainfall deficit in the oilseed growing belt and that will definitely have an impact on the yields,” said B.V. Mehta, executive director of Solvent Extractors’ Association of India. “There will be increase in imports. Fortunately for India, international prices are low.”

    Monsoon rainfall, which waters more than half India’s 145 million hectares (360 million acres) of crop land, was below the 50-year average in July and August, and September will be not be any better, according to the India Meteorological Department. Downpour since the start of monsoon on June 1 are 12 percent below the average, department data show.

    El Nino this year is the strongest since 1997-98, according Australia’s Bureau of Meteorology. The below-par performance of the monsoon also imperils the outlook of winter crops including wheat, which are mostly irrigated. The water levels at India’s 91 main reservoirs is 58 percent of the capacity as of Aug. 27, less than the 88 percent average of the last 10 years, official data show.

    While the area under monsoon crops is little changed this year at 96.8 million hectares, rice, soybeans and pulses in some areas are at risk from a prolonged dry spell, Kotak’s Hudani said. India is the world’s top buyer of lentils and imports may reach a record 4.5 million tons in 2015-16, according to the India Pulses and Grains Association.

    http://www.bloomberg.com/news/articles/2015-09-04/crops-in-india-in-dire-need-of-rains-as-el-nino-stings-monsoon
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    Steel, Iron Ore and Coal

    Joy Global cuts 2015 forecast after profit falls 37 pct

    Joy Global cuts 2015 forecast after profit falls 37 pct

    Mining equipment maker Joy Global Inc , which gets about 60 percent of its revenue from coal miners, reported a 37 percent fall in quarterly profit and cut its full-year forecast as customers cut spending due to weak prices.

    The company also said on Thursday that its restructuring charges could as much as double as it takes additional cost cut measures to cope with falling demand.

    Joy Global has cut jobs and lowered production among other measure to try to adapt to the slowing demand that has led to company's revenue declining for the 10th quarter in a row in the three months ended July 31.

    The company said it expects additional restructuring charges of $10-$20 million in the current quarter. It had earlier forecast charges of $15-$20 million for the full year.

    Joy Global said it expects to earn $1.80 per share in 2015 on revenue of $3.1 billion.

    In June, the company had said it expected to hit the lower end of its full-year earnings forecast of $2.50 to $3.00 per share and revenue forecast of $3.3 billion to $3.6 billion.

    Analysts on average had expected earnings of $2.43 per share on revenue $3.29 billion, according to Thomson Reuters I/B/E/S.

    Coal companies have been hurt by weak demand for thermal coal as utilities have switched to cheap and abundantly available natural gas.

    Sluggish demand from Europe and Asia, especially China, has also weighed on prices of metallurgical or steel-making coal.

    Joy Global's overall bookings fell 31 percent in the third quarter.

    Net income fell to $44.9 million, or 46 cents per share, from $71.3 million, or 71 cents per share, a year earlier. Revenue fell 9.5 percent to $792.2 million.

    Excluding items, Joy Global earned 54 cents per share. Analysts had expected earnings of 61 cents on revenue $798.7 million.

    http://www.reuters.com/article/2015/09/03/joy-global-results-idUSL4N11930D20150903
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    India's GVK wins court fight over Australian coal mine


    Green groups lost a fight to stop billionaire Gina Rinehart and India's GVK from building a giant coal mine in Australia, as a court on Friday dismissed an appeal against the state of Queensland's environmental approval for the project.

    Conservation group Coast and Country, originally working for three farmers, had sought to have the state environmental approval for GVK-Hancock's 30 million tonnes a year Alpha mine overturned based on the impact it would have on water supply and climate change.

    The state Land Court last year ruled that the mine should be approved with strict water management conditions or rejected.

    But the green group appealed that decision to the Supreme Court saying the Land Court did not have the right to issue two alternative recommendations and should have rejected the mine outright.

    The Queensland Supreme Court dismissed the appeal on Friday.

    The ruling eliminated one hurdle for the $10 billion Alpha mine, rail and port project, which has effectively been put on ice until it obtains a mining permit and overcomes a lack of funding due to a slump in coal prices.

    "We are pleased the court has clearly ruled that our project has continued to follow and comply with all regulatory and legal processes," GVK spokesman Josh Euler said.

    The state government, which wants new mines to be developed in the untapped Galilee Basin to promote jobs, has yet to issue a mining permit for the Alpha project, but has said it would be subject to existing water management rules.

    The Supreme Court decision was a blow, said Bruce Currie, one of the farmers represented in the case.

    "Justice has not been done. If this mine goes ahead, it risks draining away the groundwater that our lives and businesses depend on," Currie told reporters outside the court in Brisbane.

    The Queensland Resources Council on Friday launched an advertising campaign urging communities to sign a petition calling on the state to protect mining jobs against green groups looking to delay new projects.

    The Alpha project is 50-50 owned by Rinehart's Hancock Coal and GVK, with a small portion of GVK's stake owned by GVK Power & Infrastructure.

    http://www.reuters.com/article/2015/09/04/gvk-australia-coal-idUSL4N11A00W20150904
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