Saudi Arabia will rely mostly on fuel oil to run power plants when annual demand peaks this summer, enabling the country to burn less of its crude and keep more for export, according to consultants Energy Aspects Ltd.
The world’s largest crude exporter will increase imports of fuel oil even as it plans to use more locally produced natural gas to generate electricity, Amrita Sen, chief oil market analyst at the London-based firm, said by e-mail yesterday.
“I think gas will help somewhat, but any surges in summer temperatures will boost fuel oil demand,” she said. “We’ve already seen a surge in the recent extremely cold weather that pushed fuel oil demand in the Middle East region to a record high.”
The highest imports in more than a decade last year, along with increased gas use, helped Saudi Arabia reduce crude-burning at power stations to an average of 483,000 barrels a day from 528,000 barrels a day in 2012, according to official data posted on the Joint Organisations Data Initiative’s website on Feb. 18.
The nation consumed 310,000 barrels a day of fuel oil in 2013, the most since 2008, data from the group known as JODI show. Imports averaged 101,417 barrels a day, up 67 percent from 2012 and the highest since at least 2002, according to JODI.
Saudi Arabia expects to produce 40 percent more gas this year once its new Wasit processing plant begins operating by summer, according to state-owned Saudi Arabian Oil Co. Power demand peaks in the hottest months of July and August, when Saudis turn up their air-conditioners to cool homes and offices.
Wasit will process non-associated gas from the Hasba and Arabiya fields in the Persian Gulf. Officials at Saudi Arabian Oil have said the company, known as Saudi Aramco, will use some of this additional gas to supply power plants.
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