Saudi Arabia moves on long term

Sep 10, 1997 02:00 AM

Saudi Arabia is pushing ahead with multi-billion-dollar plans to consolidate its position as the world's most powerful oil state in the next decade, Western industry sources said.
Oil and gas developments coupled with major renovation work at its domestic refineries signal Riyadh's determination to capitalise on world petroleum demand growth and remedy domestic product imbalances, they said.
"A series of plans and recommendations are being drawn up to realise a new generation of projects over the next 10 years," said a source.
Plans centre on expanding and upgrading local refineries, boosting gas processing facilities and building plants to sustain flow rates at its giant onshore oilfields which make Saudi Arabia the world's largest crude producer and exporter.
Aramco has also pursued advanced talks to secure overseas refinery assets in China and India, to add to its downstream stakes in the United States, Asia and Europe and tie up an increasing volume of its crude output into guaranteed markets.
Privately-backed petrochemical ventures, based on the cheap supply of gas feedstock, are also central to the country's energy strategy in the next decade, contractors said.
In the middle of next year Saudi Aramco is expected to bring onstream the remote Shaybah oilfield and commission its upgraded and expanded refinery at Ras Tanura.
The $ 3.5 billion spent on the two projects will bring a further 500,000 barrels per day of output capacity under Aramco's wing and boost gasoline output.
Aramco has said Shaybah will consolidate output capacity of 10.3 million bpd, maintaining a cushion of 2.3 million bpd which could be called upon in times of crisis or when the kingdom secures a higher OPEC quota.
"All this extra capacity cannot be simply left mothballed," said one contractor, confident that Aramco would use the extra capacity some time in the next decade.
Contractors also gave credence to industry reports that Aramco has plans to tap into new deposits to ward off declinesin reservoir pressure in parts of its main fields. It was also mentioned that Aramco's upstream focus is shifting to other field expansion candidates now that the huge Shaybah development contract is nearly complete.
These potential projects centre on building gas-oil separation plants to maintain pressure at 4 fields mainly contributing to Aramco's main Arab Light export grade.
Renovating the Ras Tanura and Rabigh refineries are the centrepiece of a revamp of the country's downstream sector which has struggled to keep up with local product demand fired by retail price subsidies and economic growth.
Contractors are set to be invited to bid on a series of contracts worth some $ 2 billion to revitalise the Red Sea Rabigh plant which has operated well below technical capacity because of its configuration since it came onstream in 1990.
When completed, Rabigh will process more than 400,000 bpd of Saudi crude compared to present runs of around 280,000 bpd, allowing Aramco to stem its imports of gasoline and diesel.
A $1.4 billion upgrade and expansion at Ras Tanura on the Gulf coast will come onstream in the middle of next year, boosting throughput by 35,000 bpd. A project for further upgraded units has been launched for around 2005.
Aramco has also moved ahead with a $ 2 billion project to build a new processing plant at Hawiyah in its supergiant Ghawar field to boost the local gas distribution system for 2001-2002. Three other gas plants are underway.

Source: not available
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