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Saudi shura urges long-term gas strategy

Riyadh, March 17, 2009

Saudi Arabia's advisory Shura Council has urged the oil ministry to come up with a long-term strategy for domestic gas supplies and demanded greater transparency in allocation of the fuel.

Demand for gas in the kingdom for power and industry is soaring due to an economic boom fuelled by the oil price rally of 2002-2008. As most Saudi gas is produced in association with oil output, volumes fluctuate with oil production.

Saudi oil output is at its lowest in over six years as the kingdom and Opec curb output to match rapidly falling demand. This has left gas supply in the kingdom tight.

The council's economic affairs and energy committee made its recommendation in response to an annual report by the Ministry of Petroleum and Mines, the Shura Council said on its Website.

Shura Council members are appointed by the king. Although its decisions are not binding, it has become forum for debate, encouraged by King Abdullah's calls for reform in the absolute monarchy.

The council said future ministry reports should include information on the progress of oil, gas and mining projects that were planned and outlined in the ministry's report.

It recommended: 'Drawing up a long-term strategy for domestic supplies of gas and coordinating with planned industrial projects and utilities in cooperation with other government departments'.

Among departments it mentioned were the water and electricity ministry and commerce and industry ministry. In its statement the council also urged the petroleum ministry to implement 'greater transparency in measures related to the allocation of quantities of gas and its liquids'.

The Middle East Economic Survey (MEES) reported earlier this month that Saudi Arabia would expedite work on two offshore gas fields in the kingdom to meet growing domestic energy demand.

Development of the Arabiyah and Hisbah gas fields, which are not associated with oil production, would supply around 1.8 billion cubic feet per day (cfd), MEES reported.

Five years of gas exploration by international companies in partnership with state oil company Aramco in the vast desert of southeast Saudi Arabia, known as the empty quarter, have failed to find the gas needed to meet future power and industry needs.

Aramco said last week it planned 144 projects through 2014, including eight it called giant. It did not list the projects. - Reuters

Tags: Saudi | aramco | oil gas |

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