Saudi Liquids Burn Edges Up, More Rises To Come?

Saudi Arabian oil burn for powergen is again edging up. With the kingdom cutting crude production in the coming months, associated gas output is set to fall further, increasing demand for liquids fuel at power plants.

A brief comment by Saudi Energy Minister Khalid al-Falih in Baku on 17 March ( MEES, 22 March ) underlines a key limiting factor in the kingdom’s oil supply flexibility. In reiterating Riyadh’s opposition to a replay of the “80s phenomenon” where the kingdom cut production to barely 2mn b/d in a bid to manage markets, he flagged up the resultant gas shortages.

This is due to the kingdom’s dependence on associated gas – gas produced alongside crude oil – although Riyadh has been successfully reducing this. Associated gas now represents approximately one third of Saudi sales gas output. Given that Saudi Arabian gas production is inadequate to provide its power plants with sufficient feedstock, the kingdom has to burn vast quantities of liquids to meet electricity demand. (CONTINUED - 969 WORDS)


chart Saudi Arabia Direct Crude Burn: After Three Consecutive Annual Falls, Volumes Are On The Rise ('000 B/D)
chart Saudi Fuel Oil Consumption Fell In 2018, But 2019 Has Started At A Slightly Higher Pace ('000 B/D)
table Saudi Arabia January 2019 Oil Data (‘000 B/D): Net Products Exports Just Shy Of Dec18 Record As Gross Imports And Exports Both Fall By Nearly 500,000 B/D Month-On-Month