Saudi Arabia: outta gas

Saudi Arabia: outta gas:



"Saudi Arabia has a problem. It burns as much as 1m barrels of oil per day, just to generate electricity. That is more than 15 per cent of its oil exports. It has little choice — it needs to meet the electricity demand of its growing economy. So far it has not found enough alternative sources of energy to offset this of its own main export.



Natural gas has been Saudi Arabia’s chosen energy source for power generation. The country produces slightly more gas than it consumes at almost four trillion cubic feet per year. Although it appears to already have a huge supply, worth 77 years of consumption, much of this gas can only be produced together with the oil that the country has in reserve. Only increasing oil production excessively would enable the extraction of this associated gas. But that is not an option for a so-called global swing producer of crude. So it will need to look elsewhere to meet its future consumption needs.



The country’s natural gas shortage has not come for lack of effort. Saudi Arabia, through its national oil company Aramco, has long searched for more natural gas resources to help expand its supply. With power demand growing at around seven per cent annually according to Aramco, it has increased its exploration efforts. The Baker Hughes gas rig count for Saudi Arabia has doubled to a near record 45 over the past two years."



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