Saudi Arabia expects to have freed up to 1 million barrels per day (bpd) of oil for exports by 2030 by cutting its direct oil use in power generation as it looks to replace petroleum liquids with gas-powered generation and renewables, Energy Intelligence reports, quoting industry sources.
Saudi Arabia relies on crude and fuel oil for electricity generation and cranks up direct crude and fuel burns during the scorching summer months.
Saudi Arabia, the world’s top crude oil exporter, currently generates 51 percent of its electricity from petroleum liquids, and 49 percent from natural gas, sources with knowledge of the Saudi energy mix told Energy Intelligence.
The Saudi plan, also part of its 2060 net-zero goal, entails having up to 50 percent of electricity coming from renewable energy and up to 55 percent from gas, according to Energy Intelligence’s sources.
In May, as temperatures rose and demand for air conditioning in the Middle East begins to surge, Saudi Arabia raised its direct use of crude oil to 582,000 bpd, up by 185,000 bpd from April, and 131,000 bpd above year-ago levels, according to data from the Joint Organisations Data Initiative (JODI), which compiles self-reported data from countries.
This summer, direct crude and product burn at power generation plants in Saudi Arabia has accelerated, which could leave lower available crude supply for international markets, analysts say.
Reducing direct oil and petroleum liquids burned for power generation would boost the crude oil export capacity of Saudi Arabia, which has already said that its production capacity limit will be 13 million bpd when it’s reached in 2027.
Saudi Arabia will not have additional capacity to increase production above the 13 million bpd it has pledged to have by 2027, Saudi Crown Prince Mohammed bin Salman said last week.
Referring to oil supply to global markets, the Crown Prince said that “The Kingdom will do its part in this regard, as it announced an increase in its production capacity to 13 million barrels per day, after which the Kingdom will not have any additional capacity to increase production.”
By Tsvetana Paraskova for Oilprice.com