Oil volumes burned in Saudi Arabia to generate electricity have hit a record in July, reaching levels last seen in August 2010. The government is keen to free up more oil up for exports and has launched the Wasit Gas Program to develop two offshore gas fields and build a 2.5 Bcf/d processing plant to increase the amount of domestic gas available for generators.
Saudi Arabia is one of a handful of countries that burn crude oil directly for power generation, according to the Joint Organizations Data Initiative (JODI). Owing to seasonal peak demand, Saudi Arabia burned 0.9 million barrels per day (bbl/d) of crude oil in July, the highest ever recorded in JODI data for the month of July and the highest overall since August 2010.
Over the summers from 2009 to 2013, the Saudi kingdom used an average of 0.7 million bbl/d of crude oil for power generation; while Iraq and Kuwait, the next two largest users of crude oil for power generation in the Middle East, each averaged roughly 0.08 million bbl/d of crude burn.
Need to capture more associated gas
Normally, countries avoid burning expensive oil and turn to gas or coal for power generation.
However, Saudi Arabia has no domestic coal production, and most of its natural gas is associated gas, which is produced along with oil from the same wellbore.
Investment would be needed to capture this associated gas at well-head and transport via pipelines for use in gas-fired power plants.
Alternatively, Saudi Arabia would need to expand onshore non-associated gas production but the high sulphur content of these fields and low domestic gas prices has made such projects unattractive for foreign investors.
Surge in power consumption
As net electricity consumption in Saudi Arabia has more than doubled since 2000 to over 232 billion kWh, the government is keen to diversify its power generation sources and improve overall energy efficiency.
The hunger for energy is driven by the kingdom's rising population and growing economy, with GDP up 4.7% year-over-year in the first quarter of 2014, compared to 3.8% growth in the first quarter of 2013. Saudi Arabia's Central Department of Statistics & Information estimates that the country's population will grow 2.6% in 2014 to more than 30 million residents, further increasing electricity demand.
By 2032, Saudi Arabia is planning to more than double its available generating capacity from 58 gigawatts (GW) to 120 GW by developing solar and nuclear capacity as well as new gas power plants in line with the Wasit Gas Program.
Gas To Power Journal