Bloomberg reported that Saudi Arabia and neighbor Kuwait seek to add natural gas supply to avoid burning crude and refined products to generate power.
Mr Ahmad Al Saadi VP of gas operations at Saudi Aramco said that we are picking up gas exploration. Any liquid fuel we are burning comes at the expense of our exports. Middle East oil producers like Saudi Arabia, Kuwait and the UAE are largely dependent on gas found together with crude oil. Output of the fuel is crimped because the Organization of Petroleum Exporting Countries limits the amount of gas that can be extracted.
Mr Farouq al Zanki CEO of Kuwait Petroleum Corporation said that Kuwait, which uses an average of 200,000 to 300,000 barrels of oil and refined products each day to generate power, seeks to increase gas supply through liquefied natural gas imports and associated gas finds. The company aims to produce more gas as oil production rises and to find stand alone deposits. He said that our plan is to use less oil than gas. If worst comes to worst, we would continue to use the more expensive fuel.
Mr Al Saadi and Mr Al Zanki were speaking in Qatar, the world’s largest LNG exporter, where they were attending a gas supply conference. Qatar’s ample supplies are in contrast to other states in the region whose governments seek added gas to feed growing economies and industry.
Saudi Arabia’s domestic oil and gas use is growing faster than its economy, rising at an average of 5.9% annually in the past 5 years, the kingdom’s central bank governor Muhammad al Jasser said in September. The Saudi economy excluding oil may expand 4.5% in 2010 according to the International Monetary Fund compared with 3.3% in 2009.
Mr Al Saadi said that what is really making the difference is that domestic demand is growing. Implementing renewable energy projects like solar power generation and starting efficiency programs to cut energy use are steps to have an immediate impact on oil use.
Mr Paddy Padmanathan CEO of ACWA Power International said last week that Saudi Arabia consumes about 1.2 million barrels per day of oil and refined products for power generation and about the same amount of crude for processing.
He said that unless the government goes ahead with a plan to diversify power generation sources, crude available for export could slip to 45% of the total produced by 2030. The kingdom produces about 8 million barrels of oil a day and has a capacity to pump more than 12 million daily.
Mr Sami al Rushaid chairman of Kuwait Oil Company said that Kuwait, which pumps about 3 million barrels a day, is producing about 1 billion cubic feet of gas a day less than it needs for domestic use. The country needs about 2.2 billion cubic feet of gas a day and this requirement will rise to 5 billion cubic feet a day by 2030. It produces 1 billion cubic feet a day of associated gas and 130 million to 140 million cubic feet a day of non associated gas.
(Sourced from www.arabianbusiness.com)
