Fahad Shadeed/Reuters/File
Cars travel along King Fahad main road in Riyadh, as banners are hung to welcome Saudi Arabia's King Abdullah bin Abdul-Aziz in this 2011 photo. The Saudis announced a major new gas find recently, which could help offset soaring domestic demand for oil.

Major natural gas find by Saudis. A shift ahead?

Saudi Arabia has every incentive to develop its new natural gas discovery in the Red Sea. If it doesn't, it could become an oil importer in the decades ahead.

Saudi Arabia has announced that they made a major new find in natural gas in the Red Sea.
The Saudis are already ranked 5th in the world for their reserves of natural gas, but they are only ranked 9th in terms of production of the commodity. They account for about 3 percent of world natural gas production. Compared with their oil production (13 percent of world production), there is clear room for growth.
A couple of weeks ago, a Citigroup report said that Saudi Arabia could become a net importer of oil, if current trends continued. That was because of the booming use of oil for electricity production in the kingdom.

The Saudis aren't expected to allow their main source of about 80 percent of their export revenue to be eaten away by domestic electricity production; they will eventually substitute other sources of energy for the oil they currently use to produce electricity.
If this natural gas find is a sign that Saudi Aramco has begun efforts to explore and exploit its gas reserves, this could mark a signal that the country is accelerating its efforts to switch its electricity fuel from valuable oil to the more economically friendly natural gas. Given Saudi Arabia's vast reserves of oil, the geological fact that oil and gas often exist in close proximity, and their close proximity to Qatar's giant North Dome field, we could quickly see Saudi Arabia move up world rankings in terms of proved reserves and production.

This would be a big switch for Saudi Arabia. Gas in that country has been seen as solely a byproduct of oil production: it was flared as waste for decades, though Aramco claims to have reduced this practice over the past 10 years. If Saudi Arabia ramps up its production of natural gas, it would add to the "Golden Age of Gas" as predicted by the International Energy Agency. With significant production growth and a move to export, it could even undercut the potential export market that American firms have been eyeing over the past year.
Although it is early for speculation of such a scale, further developments like these in Saudi Arabia bear watching.

– This article is adapted from a story in Energy Trends Insider, a free subscriber-only newsletter that identifies and analyzes financial trends in the energy sector. It's published by Consumer Energy Report

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Major natural gas find by Saudis. A shift ahead?
Read this article in
QR Code to Subscription page
Start your subscription today