Saudi Arabia’s gas deficit needs to be addressed if the kingdom’s industrial boom is to be realised
The fast-tracking of gas projects in Saudi Arabia that started with the offshore non-associated Karan gas field shows no signs of abating.
Karan is almost ready to go onstream and other major gas projects, such as the Wasit gas development and the Shaybah natural gas liquids project, are now entering their construction phases.
By 2015, these projects will increase Saudi Arabia’s gas production by more than 50 per cent, from 10.2 billion cubic feet a day (cf/d) to about 15.5 billion cf/d.
Credit must go to Saudi Aramco’s development team for the swift reaction to what could have become a serious problem for Saudi Arabia’s massive industrial diversification plans.
One might argue that the greatest legacy Aramco was bequeathed by its former incarnation as a subsidiary of the US’ Chevron is that it can identify an essential requirement quickly and act upon it immediately. It has certainly done so on this occasion.
High oil prices are currently being used as the facilitator for a swathe of power and industry projects. As the kingdom strives to become a global player in a number of industries, especially petrochemicals, it needs all the gas it can get to enable such projects to be realised.
Saudi Arabia has many incentives for attracting businesses to the country, but charging $0.75 a million BTUs for industrial use may well be one of its most tempting. Even more so when most Western nations charge about $4 for the same amount.
When the kingdom has enough gas for everyone, the massive industrial boom it has been promising will become reality.
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