Saudi Arabia to maintain natural gas self-sufficiency

Saudi Arabia will remain self-sufficient in natural gas, with production rising from an estimated 116.2bn cubic meters (bcm) in 2013 to 152bcm by 2022, Business Monitor International said in its quarterly updates.

Efforts to tap the Red Sea and continued efforts to extract tight gas could surprise to the upside.

With industry estimates placing the country’s technically recoverable shale gas resources at an estimated 18.1trn cubic meter (tcm) in April 2012 and pressure stemming from domestic consumption, Aramco announced an accelerated timetable for shale gas development. Alongside new offshore drilling, industry sources told Reuters in January 2013 that the Kingdom will see record rig counts as it boosts efforts to tap unconventional gas before 2020.

Moreover, for 2013, the report expects crude oil production to rise to an average for the year of 11.6mn b/d, with natural gas liquids (NGL) and processing gains bringing total liquids production to 11.6mn b/d for the year. Total liquids supply by the end of the forecast period is set to rise to 12.8mn b/d by 2022. Domestic consumption will increase to 4.32mn b/d by the end of our 10-year forecast period, from an estimate of 3.29mn b/d in 2013.

Rising consumption of oil as power feedstock, driven by low lifting costs and subsidies will drive much of the gains.

Saudi Arabia has accelerated a number planned projects as it seeks to increase use of gas as feedstock for both power and the strategically important petrochemicals industry.

A strong growth in gas production is anticipated, with a number of new projects in the pipeline brought forward in recognition of the growing domestic consumption.

Meanwhile, the Organization of Petroleum Exporting Countries will curb crude shipments through most of this month as demand from Asian refiners drops during seasonal maintenance, tanker tracker Oil Movements said.

The group that supplies about 40 percent of the world’s oil will ship 23.7 million barrels a day in the four weeks to June 22, down 1 percent from 23.93 million in the previous period to May 25. The figures exclude two of OPEC’s 12 members, Angola and Ecuador. The organization kept its production target at 30 million barrels a day at a meeting in Vienna last week.

“Middle Eastern shipments will slip by 1.1 percent to 17.4 million barrels a day, compared with 17.6 million in the month to May 25, according to Oil Movements. That figure includes non-OPEC nations Oman and Yemen.

Crude on board tankers will advance 0.6 percent to 471.36 million barrels versus 468.53 million, data from Oil Movements show. — SG

Saudi Gazette