Tag Archives: Saudi Arabia

Saudi Arabia to build world’s largest desalination plant

The Saline Water Conversion Corporation yesterday announced its plan to establish the world’s largest desalination plant in Rabigh, northwest of Jeddah, with a capacity of 600,000 cubic meters of water daily.

“Work on the project will start in the first quarter of 2014 and will be completed in 2018,” said Muhammad Al-Thubaity, director general of SWCC in the Western Region, adding that allocation for the multibillion riyal project has been made in this year’s budget.

He said the new plant would supply water to north Jeddah, Makkah and Taif. The capacity of the present desalination plant in Rabigh has been increased to 20,000 cubic meters daily to supply drinking water to Khalees and Rabigh.

Al-Thubaity said the new Rabigh plant, which will follow reverse osmosis system, would meet water requirements of cities and villages around Rabigh. He emphasized SWCC ‘s determination to supply adequate amount of water to all parts of the Kingdom.

SWCC currently produces around 20.7% of the total world production of desalinated water. Around 88.5 percent of water supplied by SWCC is produced by large MSF plants, 10.6 percent produced by large RO plants, which are combined with existing dual MSF/power plants and 0.9 percent is produced by small size (satellite) RO, MSF and ME plants.

SWCC announced last year that it wanted to add nearly four million cubic meters of capacity to its desalination portfolio over the next 15 years. SWCC , the largest procurer of desalination infrastructure in the world, anticipates a gap of about 1.5 million cubic meters between water demand and supply from current facilities by 2025.

New plants are under construction in Ras Al-Khair and Jeddah, which will provide an extra 1.3 million cubic meters. SWCC has identified capacity expansions at Shuqaiq, Shuaiba and Jubail, plus two new plants apiece at Alkhobar and Yanbu, as a way of adding a further two million cubic meters to its capacity.

by Anric

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Posted by on February 12, 2013 in Investments, Water


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Saudi Arabia could soon be a net oil importer – soon

Citigroup Inc. has said the world’s biggest crude exporter, Saudi Arabia risks becoming an oil importer in the next 20 years. Oil and its derivatives are used for about half of the kingdom’s electricity production, which at peak rates is growing at about 8% a year, the bank said.

If Saudi Arabian oil consumption grows in line with peak power demand, the country could be a net oil importer by 2030,

Heidy Rehman, an analyst at the bank, wrote. The country already consumes all its natural-gas production and plans to develop nuclear power, which pose execution risk amid a lack of available experts, safety issues and cost overruns, Rehman said.

Read our previous post:  Saudi oil: The threat from within

Saudi Arabia is home to less than half a percent of the world’s population — and fully 16 percent of the world’s proven oil reserves. Nonetheless, Citigroup projects that the desert nation may become an oil importer in the next 20 years. “If Saudi Arabian oil consumption grows in line with peak power demand, the country could be a net oil importer by 2030,” Heidy Rehman wrote in a 150 page report for the bank.

Already Saudi Arabia uses a quarter of its fuel production and all of its natural gas domestically, meaning that its per capita consumption is higher than the United States despite its miniscule industrial base. Demand for electricity, moreover, is expected to grow by as much as 8 percent a year.

The Telegraph has more:

The basic point — common to other Gulf oil producers — is that Saudi local consumption is rocketing. Residential use makes up 50 percent of demand, and over two thirds of that is air-conditioning.

The Saudis also consume 250 litres per head per day of water — the world’s third highest (which blows the mind), growing at nine percent a year — and most of this is provided from energy-guzzling desalination plants.

Analysts including Jeremy Leggett of the UK Industry Taskforce on Peak Oil and Energy Security have suggested that dwindling Saudi Arabian exports could contribute to a global fuel shortage, potentially causing “massive stress to the global economy.”

Renowned Oil Industry Expert, Mike Rothman says “Nevertheless, with refined product oil demand growing about 7% a year, the Saudis are consuming more than 25% of their total oil production (crude & liquids) – which looks to keep expanding. Aside from the issue of OPEC’s spare output capacity having been exhausted, the KSA’s oil burn, at a minimum, contributes to the Saudi’s hawkish oil price stance.”

Rehman’s report comes less than six months after another Citi report, which predicted an era of oil abundance — and of reduced American dependence on OPEC:

[T]he US has become the fastest growing oil and natural gas producing area of the world and is now the most important marginal source for oil and gas globally. Add to this steadily growing Canadian production and a comeback in Mexican production and you get to a higher growth rate than all of OPEC can sustain.

Download the entire report: Energy 2020 – North America, The New Middle East

Either way, Saudi Arabia’s share of global exports is on the wane, so the United States had better stop treating it as a de facto Strategic Petroleum Reserve.

Read our previous post: Saudi Arabia’s Domestic Energy Consumption – Burning up Export Potential


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Saudi to invest over US$11bn in farmland projects

Saudi Arabia has invested around 40 billion riyals (US$11bn) in agricultural and livestock projects in the Ukraine, Brazil, Argentina, Canada and Sudan, it was reported.

The projects in the Ukraine, Brazil, Argentina and Canada were announced by Eid al-Ma’arik, the chairman of the agricultural investment committee at the Saudi Council of Chambers, according to Al-Watan newspaper.

The Asharq Al-Awsat newspaper also reported that Fahd Balghunaim, the Saudi agriculture minister, had signed an agreement to increase its investment in agricultural land in Sudan.

Balghunaim said earlier this year the kingdom was encouraging Saudi companies to invest in farms in Africa as it seeks to secure supplies of food imports to replace local production.

Related Post: Economic disaster beckons as water-hungry investors buy up Africa’s land

The government decided in 2008 to gradually phase out all water-intensive crops including grains by 2016 amid commodity price spikes, Balghunaim said at a World Economic Forum meeting in Addis Ababa, Ethiopia’s capital.

Saudi Arabia plans to increase imports of food, including the 3 million metric tonnes of wheat consumed annually, he said.
“Africa is the region that represents the biggest opportunity to increase food production with vast tracts of land and a big difference between existing potential and current productivity,” he said.

“Saudi companies are bringing the technology and equipment to help increase production.”

In Ethiopia, Saudi Star Agricultural Development, a food company owned by billionaire Mohammed al-Amoudi, announced last year it plans to invest $2.5bn by 2020 developing a rice-farming project on 10,000 hectares of land on lease for 60 years.

It also has plans to rent an additional 290,000 hectares from the government.

Critics of the project including GRAIN, the Barcelona-based advocacy group, argue that domestic farmers are being dispossessed and the country shouldn’t rent land cheaply to foreign investors to grow crops when about 13 percent of its approximately 80 million people still rely on food aid.

“We want to be an assisting player in the African agriculture revolution,” said Balghunaim. “Our ethics don’t allow us to take food from the mouths of people who need it.”

African nations should be able to end their dependency on food imports, become net crop exporters and cut trade deficits by adopting modern farm methods, Balghunaim said.



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Saudi Energy Outages spark riots

In Saudi Arabia, where temperatures are among the highest in the region, the onset of Ramadan has resulted in a series of power outages that have sent hot and hungry protestors to the streets.

8% Energy Spike in Saudi Arabia

It’s hard to imagine that the oil-producing giant Saudi Arabia could ever have power outages, but just over one week into the holy month of Ramadan, electricity consumption in some areas of the Kingdom has increased by as much as 8%, according to the Saudi edition of al-Hayat.

As many people stay home to nurse their hungry bellies and hot tempers during this trying time, air-conditioners are cranking even more than usual. Also, women or servants sometimes spend hours cooking elaborate Iftar meals – further increasing energy consumption.

This spike has put undue pressure on the national grid.

Saudi Electricity Company head Abdul Moueen bin Hassan al-Sheikh says that his team is working around the clock to address the power outages that have occurred in parts of Jeddah, but he says that protestors are impeding progress.

Saudi Protestors Dispersed by Police

“Protesters made it difficult for technicians to fix the failure in the Om al-Selm in southern Jeddah,” he said.

Police were brought in to disperse the protestors so that the utility company could repair the affected station.

Power outages start as early as dawn, when Saudis prepare to eat their pre-fast meal – the Sohour. As a result, residents have been eating by candlelight and the dawn call to prayer has been performed without the microphone

Al-Sheikh added that construction works in the area have also disrupted electrical infrastructure and that the utility is working with the Jeddah City Council to reduce such incidents.

:: Al Arabiya

Image credit: Old gas station in Arabian desert, Shutterstock



Today’s level of water usage in the Gulf region is not sustainable.

A recent World Bank study urged governments in the Middle East and North Africa to invest now if they want to avoid severe water shortages in the future.   “With about 5 per cent of the world’s population, the MENA region has less than one per cent of the world’s renewable freshwater,” said Antoine Khalife, Regional Project Sales Manager, Grohe Middle East and Africa. Given the region’s rapid population growth, within the next 30 years, water resources in the region are expected to fall by another 50 per cent. “But we have seen considerable progress in recent years made by some governments to tackle this issue. A good example is the Estidama rating introduced by the Abu Dhabi government in addition to a number of LEED compliant projects across the region,” he added. “Unfortunately, with the current pace of conservation measures, regional demand will, however, soon outpace supply in some countries.”

Up to 91 per cent higher water usage than the global average
This view was echoed in a Booz & Company January report, which noted that on a per capita basis, Saudi Arabia and the United Arab Emirates consume 91 per cent and 83 per cent more water than the global average, and about six times more water than the UK. Qatar and Oman are also above the global average for water consumption, despite their desert climates, it said. “GCC residents and businesses have disregarded the consequences of their water usage to enjoy benefits more common in countries with ample rain and overflowing aquifers. But with the population of the GCC increasing in excess of two per cent a year, and with rapid expansion in the region’s economies, there is a growing recognition within many GCC governments that current water consumption patterns are unsustainable.” Agriculture reform, education of consumers, tariff structure reforms, wastewater reuse and investments in desalination and other technologies were some of the recommendations put forth by the report.

Desalination provides two-thirds or more of the potable water used in the UAE, Kuwait, Qatar and Bahrain, and will continue to play a huge role in the GCC’s water development efforts, it added. But desalination carries enormous economic and environmental costs. GCC countries will likely invest more than $100 billion in their water sectors between 2011 and 2016. Some of these investments will be in improved desalination technologies, which could involve solar energy or new ways of filtering out salt or making it evaporate, added the report.

Solar desalination plants
In January, in the same, month, the Environment Agency – Abu Dhabi (EAD) announced the completion of the construction of 22 solar desalination plants as part of the agency project to construct 30 solar desalination plants in different locations across the Emirate of Abu Dhabi. EAD is still testing this new solar desalination technique and working on perfecting the efficiency of this method through its pilot project launched in Umm Al Zamool. Each of the plant produces around 1,100 gallons of clean water per hour – approximately 6,600 gallons on an average day.

Ralf Stahl, Managing Partner, Zeoplant said that certain key processes can be inculcated across board to achieve sustainable reduction of water usage across projects. He has been part of the landscaping industry for the last nine years. “Many regulations are still slow to address the issues governing the existing projects market, which constitute 90 per cent of the market and hold greater potential business for us. Especially, if you look at it in light of the current slowdown of new projects,” said Stahl.

Overconsumption of water in the GCC is a problem that can no longer be ignored, as Saudi Arabia and the United Arab Emirates respectively consume 91% and 83% more water per capita than the global average. Governments need to take a variety of steps to reduce the demand for, and increase the supply of, potable water. Some steps, such as tariff reforms, will involve educating consumers. Others will involve limiting agricultural usage and

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USA – Saudi Arabia set to sign deals on renewable energy projects

RIYADH: US Assistant Secretary of Commerce for Manufacturing and Services Nicole Lamb says the United States and Saudi Arabia are prepared to sign a number of deals related to the establishment of investment and service projects depending on renewable energy resources.

Ms Lamb, who is leading a 13-member business delegation to the Kingdom, expressed US support to the Kingdom on its drive to develop clean energy and that they are waiting for bigger cooperation between the two countries to realize goals put forth by the Kingdom.

She said the US administration and companies as well are concerned over the creation of investment opportunities with their Saudi counterparts, particularly on projects depending on renewable energy.

The US will extend multiple services to the Kingdom in its pursuit to lessen dependence on oil for power generation and development of alternative energy sources, environmentally secure and highly credible, particularly in light of growing demand on energy in the Kingdom, she said.

She noted that the Kingdom’s announcement of investment of $100 billion in the next 10 years for development of solar and nuclear energy will help the US business delegation explore investment opportunities in the Kingdom and strengthen ties between the two countries.

The US official, who met with Saudi officials and businessmen at the Council of Saudi Chambers of Commerce and Industry (CSCCI) touched on efforts that could be made by Saudi trade partners in solving issues related to the renewable energy in the Kingdom.

CSCCI Secretary General Fahad Al-Sultan said Saudi-US relations were built on strategic basis during the last 10 years.

He said their meeting with US delegation explored suitable mechanisms for cooperation between business sectors in both countries.

The meeting centered on three themes: Kingdom’s energy needs and its five-year plan, the Kingdom’s vision on renewable energy, and the Kingdom’s concern over building clean energy system, he noted.

He affirmed that the Kingdom has clearly opted to depend on knowledge-based economy.

Oil For Power

Saudi Arabia, the largest producer in OPEC, uses crude and refined products as fuel for power stations because it doesn’t have enough gas to generate all the power it needs and also supply industry. Liquid fuels generate about half of the country’s power, according to the state-run utility Saudi Electricity Co. (SECO) Saudi Arabia burns some 800,000 barrels a day of oil equivalent to satisfy domestic demand, Khalid Al Senani, the gas supply director at the Ministry of Petroleum and Mineral Resources, said in Doha, Qatar, on Nov. 30.

The nation’s other power plants use gas, which costs about one-fourth as much as oil on the basis of a barrel of oil equivalent, according to U.S. benchmark prices.

By burning oil to keep electricity flowing, Saudi Arabia may find it harder to maintain its global role as the crude supplier of last resort.

Related Article:  Middle East to spend US $ 180 Billion on Energy Project


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Qatar LNG Production – a quick snapshot

Qatar‘s current and future regional influence are strongly linked to its natural gas sector. With dependence on oil viewed as a strategic liability, Qatar’s forward-looking investments in LNG production and export technology give the country an advantage in an increasingly popular energy commodity. Also, because it cannot be undermined in price or supply guarantees by Saudi Arabia, Qatar’s LNG exports have given it considerable independence compared to its oil-dependent neighbors who are more likely to fall in line with Saudi views on most foreign policy issues.

Due to its significant LNG infrastructure investments and sizable natural gas reserves, Qatar will continue to be a key supplier of LNG for roughly the next 20 years. But with natural gas prices expected to peak within the next three to five years, Qatar faces both a shrinking profit margin and a more competitive market as regions such as North America are poised to become exporters themselves. Qatar will continue its attempts to mitigate some of these factors by encouraging its current customers to sign larger, longer-term deals — some up to 20 years — in an effort to lock in at current prices. Qatar has also been actively seeking to diversify its economy away from LNG and seek investments in alternative energy technology.

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