JEDDAH: Saudi Arabia and Kuwait seek to add natural gas supply to avoid burning crude and refined products to generate power, officials from the two nations' state oil companies said. "We are picking up gas exploration," Ahmad Al-Sa'adi, vice president of gas operations at Saudi Aramco, said Tuesday at a conference in Doha, Qatar. "Any liquid fuel we are burning comes at the expense of our exports." Middle East oil producers like Saudi Arabia, Kuwait and the United Arab Emirates are largely dependent on gas found together with crude oil. Output of the fuel is crimped because the Organization of Petroleum Exporting Countries limits the amount of gas that can be extracted. Kuwait, which uses an average of 200,000 to 300,000 barrels of oil and refined products each day to generate power, seeks to increase gas supply through liquefied natural gas imports and associated gas finds, Kuwait Petroleum Corp. Chief Executive Officer Farouq Al-Zanki said. The company aims to produce more gas as oil production rises and to find stand-alone deposits. "Our plan is to use less oil than gas," he said. "If worst comes to worst, we would continue to use the more expensive fuel." Al-Sa'adi and Al-Zanki were speaking in Qatar, the world's largest LNG exporter, where they were attending a gas supply conference. Qatar's ample supplies are in contrast to other states in the region, whose governments seek added gas to feed growing economies and industry. Saudi Arabia's domestic oil and gas use is growing, rising at an average of 5.9 percent annually in the past five years, the Kingdom's central bank governor Muhammad Al-Jasser said in September. The Saudi economy, excluding oil, may expand 4.5 percent in 2010 according to the International Monetary Fund, compared with 3.3 percent in 2009. "What is really making the difference is that domestic demand is growing," Al-Sa'adi said. Implementing renewable energy projects like solar power generation and starting efficiency programs to cut energy use are steps to have an immediate impact on oil use, he said. Saudi Arabia consumes about 1.2 million barrels a day of oil and refined products for power generation and about the same amount of crude for processing, ACWA Power International Chief Executive Officer Paddy Padmanathan said last week. Unless the government goes ahead with a plan to diversify power-generation sources, crude available for export could slip to 45 percent of the total produced by 2030, he said at a conference in Abu Dhabi. Kuwait, which pumps about 3 million barrels a day, is producing about 1 billion cubic feet of gas a day less than it needs for domestic use, Kuwait Oil Co. Chairman Sami Al-Rushaid said at a conference there Monday. The country needs about 2.2 billion cubic feet of gas a day and this requirement will rise to 5 billion cubic feet a day by 2030, he said. It produces 1 billion cubic feet a day of associated gas and 130 million to 140 million cubic feet a day of non-associated gas. OPEC member Kuwait plans to spend as much as $90 billion on oil projects inside and outside the country over the next five years, a top oil executive said Monday. "About $90 billion will be spent over the next five years to achieve our strategy," said Hashim Al-Refaai, managing director for planning with Kuwait Petroleum Corp. (KPC), the emirate's national oil conglomerate. More than a third of the amount is earmarked for two major projects to build a new refinery at a cost of $14 billion and upgrading two existing refineries for $16.3 billion, he told the sixth annual conference on Kuwait projects. The two projects have been stalled by political disputes between MPs and the government over the past five years. The 615,000-barrels per day (bpd) refinery project was scrapped by the Kuwaiti government after awarding it to South Korean and Japanese firms due to protests by opposition lawmakers that its tendering did not go through the proper legal channels. Faruq Al-Zanqi, the CEO of the national oil company KPC, told reporters Monday that he is hopeful the two projects will be tendered and awarded in 2011.
