Saturday , February 29 2020
Home / africa / The real cost of gas ambitions of Saudi Arabia

The real cost of gas ambitions of Saudi Arabia

The global market for liquefied natural gas (LNG) will become even more competitive over the next few years. Saudi Arabia, the world's largest oil exporter, currently claims to be a major LNG exporter, joining the LNG heavyweights in Qatar, Australia and the United States.

Saudi Aramco, the state executive director, said yesterday that the company needs to invest $ 150 billion over the next decade, as the company plans to increase output and become an exporter. The report says the company is also promoting gas development plans to offset domestic oil consumption, in order to provide more oil for export. Saudi Arabia also plans to produce 10 percent of its capacity from renewable sources in the next five to six years to diversify its energy mix and free up even more crude for export.

The Kingdom and the de facto OPEC are developing about 30 solar and wind projects focused on 9.5 GW of renewable energy sources by 2023, and also plan to build 17.6 GW of nuclear capacity by 2032.

Saudi Aramco plans to increase gas production to 23 billion standard cubic feet (scf) per day from 14 billion scf at present, its CEO Amin Nasser said at a chemical industry event in Dubai. "Our gas program … will attract about $ 150 billion in investment over the next decade," he said. "We also have world-class unconventional gas resources that quickly complement our large traditional resources."

"We are striving to move from satisfying our communal industry in the kingdom, which will occur, in particular, with an increase in renewable and nuclear supplies as an exporter of gas and gas products." Related: Natural Gas Drives Saudi geopolitical axis

Nasser’s remarks come a few months after Saudi Arabia and Russia showed interest in the joint development of LNG, including Saudi Arabia, combining Russia's largest energy giant Novatek in the Arctic project LNG 2 LNG. The Arctic LNG-2 plant worth $ 20 billion, which will begin in 2022 or 2023, will be the second gas liquefaction project in Novatek after the Yamal LNG, which began late last year. The Russian company is also interested in building a regasification terminal in Saudi Arabia, Russian Energy Minister Alexander Novak said at the time. During the meeting, Saudi Arabia also indicated that in the next ten years it wants to double its own gas production.

Geopolitical Energy Alliance

Moreover, the growing oil alliance between Saudi Arabia and Russia has already changed the global oil markets, replacing the dominance of Saudi Arabia in the oil markets with its outstanding status in this new coalition of the two countries. In essence, what the Saudis can do, until the last overhang from 204 to 2016 becomes part of the world's only manufacturer of oil seesaws, should now be done in all senses and purposes with the help of Russia.

Going forward, this energy and the emerging geopolitically important alliance can also change the LNG markets. For his part, Russian President Vladimir Putin announced his intention to fight Qatar in order to become a global LNG exporter. However, since Qatar predicts an increase in liquefaction capacity from 77 million tons per year to more than 100 million tons per year over the next five years, Putin’s goal has a small chance of success. However, with the help of Saudi Arabia, both Moscow and Riyadh can still be a major influence on global LNG markets and, therefore, create even more geopolitical levers for both countries, especially in the Middle East.

However, the problem for the Saudis is that the growing relations between Riyadh and Moscow may be worth the fact that relations between the United States and Russia are at the lowest level after the end of the Cold War. Over time, Saudi gas ambitions, as well as the need to rely on Russia to weaken world oil markets, may have to be compared with Riyadh’s relations with Washington, especially because the United States is still the largest arms supplier in the world, working with the United States. to test Iranian ambitions of hegemony in the Middle East, while the US Navy still protects oil supplies to Saudi Arabia through the troubled Strait of Hormuz and provides most of the world's marine shipping ways.

Tim Dyce for

More Top Reads From

Source link