Saudi Aramco Plans to Double Power Supply, Conserve Energy to Save Crude

Saudi Aramco, the world’s largest state-owned oil company, plans to double its power-generating capacity to 4,000 megawatts by 2015 to supply all the electricity it expects to need to produce crude and natural gas.

The company is expanding power plants at existing oil and gas sites and aims to build generators for refineries and other facilities that are under development, Ziyad Al Shiha, the executive director of Aramco Power Systems, told reporters today at a conference in Dhahran, Saudi Arabia.

Saudi Arabia and other Persian Gulf oil producers are boosting power supplies to meet the demands of growing economies and populations. They are also looking for ways to use less of their valuable crude and gas as fuel for power stations.

Saudi Arabia may need to burn as much as 3 million barrels of oil a day by 2020 to generate power if it doesn’t improve efficiency, Al Shiha said. This would far exceed the 800,000 barrels of oil equivalent that the Ministry of Petroleum and Mineral Resources estimates the kingdom’s power plants use now.

“The growth in power and water demand is huge, and the investments required are huge,” Abdullah al-Shehri, governor of Saudi Arabia’s Electricity and Co-Generation Regulatory Authority, said today at the Saudi Water, Electricity and Power conference in Dhahran.

Targeting Self-Sufficiency

Aramco is targeting an increase in company-wide generating capacity to as much as 4,700 megawatts from the current 2,000 megawatts, Al Shiha said, without giving a timeframe for the expansion. The additional capacity wouldn’t be part of the national power grid and would make Aramco independent in power by 2015, he said.

Saudi Arabia has an overall generating capacity of about 45,000 megawatts, according to the state utility Saudi Electricity Company. This is likely to almost double to 75,000 megawatts by 2018 and rise to more than 120,000 megawatts by 2030, according to the utility.

The country could save “hundreds of thousands” of barrels and cut peak power demand by at least 10,000 megawatts over the next 20 years if it takes steps to curb oil consumption and conserve energy, the regulatory authority’s al-Shehri said. In one such step, Aramco is developing more so-called co-generation plants that gather heat from the burning of fuel to make steam, which they then use to turn turbines and generate additional electricity.

Better efficiency at power plants and industrial sites could save as much as 1 billion cubic feet of gas that is currently wasted, providing enough fuel to produce 60,000 megawatts, Aramco’s Al Shiha said.

Saudi Arabia, the world’s biggest oil exporter, pumped 8.292 million barrels of crude a day in March after pumping over 9 million barrels a day in February, Oil Minister Ali al-Naimi said on April 17. It exports what it does not use at home for power generation or refining.

The kingdom will need investments of more than $100 billion over the next decade to pay for power generation, transmission and distribution, al-Shehri of the regulatory authority said in Abu Dhabi, the capital of the United Arab Emirates, on March 28.

To contact the reporters on this story: Anthony DiPaola in Dhahran, Saudi Arabia at adipaola@bloomberg.net.

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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