During a webinar hosted by the Council’s Middle East Chapter and its chair Ed Whitnell, NOV, Salih Merghani, Vice President for Energy Sector, Olayan Group provided an overview of the Saudi Arabia energy sector that included future supply and demand, efficiency initiatives and the kingdom’s flagship programs.
As part of its ‘Vision 2030,’ the Kingdom of Saudi Arabia is seeking to view the energy system as a whole with a comprehensive plan addressing supply, demand, sustainability and its contribution to GDP.
The Saudi energy mix includes an ambitious plan to change the energy mix from primarily depending on fossil fuel to an energy mix with 45-50% renewables continuation and shift on the thermal generated power to efficient gas-fired combined cycle gas turbines (CCGT). This plan started materializing already with a three-bid round awarded around 3.3GW with record low prices, reflecting the interest of the business community on the future of these projects.
With the region broadly, and Saudi specifically, producing the lowest cost per barrel of oil, the area’s production will continue to remain attractive throughout the energy transition with focus on the converting oil to petrochemical products that address the global rising demand, Merghani said. Additionally, conventional gas production continues to grow in the region, with its output second only to North America’s total gas production.
The Saudi plan emphasizes reducing the energy intensity of key sectors, such as utilities, through retrofits that address the population’s demand.
Merghani said Saudi Arabia has a very assertive plan to address CO2 emissions through the “circular carbon economy” built on four pillars of sustainability: reduce, reuse, recycle and remove. SABIC, a chemical manufacturing subsidiary of Saudi Aramco, is the largest carbon capture and utilization plant, removing 500,000 metric tons of CO2 per year from the production of ethylene glycol. Additional carbon removal will come from reforestation and carbon adaptation projects.
Contribution to GDP or local content has been previously covered by external experts as a part of the chapter’s ongoing market intelligence sessions.
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Maria Suarez, Director Government Affairs, writes about industry-specific policies for the Energy Workforce & Technology Council. Click here to subscribe to the Council’s newsletter, which highlights sector-specific issues, best practices, Council activities and more.