Inefficient Oil Plants Can Lead To ME Energy Crunch

The Middle East will have to begin importing crude in future if it continues to generate electricity through inefficient means, according to a study by Siemens and Technical University of Munich.

The study warns that the entire oil output in the Middle East will fall short of demand if the region continues to utilise inefficient oil-fired power plants.

The Middle East is expected to see a steep rise in energy demand in the future. The study estimates that Saudi Arabia, the region’s biggest crude oil producer, is expected to see double the existing power demand by 2030. About half of Saudi’s power is being generated in oil-fired power plants and the rest in gas power plants.

The study warns that if the energy mix remains unchanged, then the country will have to begin importing crude within just three decades. The Kingdom will no longer be able to produce enough oil for its own consumption.

While inefficient oil-fired power plants also increase carbondioxide emissions, but these emissions can be confined to the current level if more gas powered plants are used for energy production, the study said.

Saudi’s natural gas deposits would be enough to generate around two thirds of the country’s power requirement for more than 100 years. At the same time more than 40 million tons of crude oil per year could be saved.

The study also found that pursuing alternative sources of energy to limit carbondioxide emissions will cost Saudi Arabia an additional $60 billion.

“The rapidly increasing domestic demand for energy is a major challenge to the countries of the Middle East,” said Michael Suess, member of the managing board of Siemens AG and CEO of the Siemens Energy Sector.

“More efficient power plants and greater utilisation of local natural gas deposits to fuel high-efficiency gas power plants can help to quench the thirst for energy sustainably and at an affordable cost.”

Gas sector investments have been rapidly increasing across the GCC with all countries maintaining their focus on gas developments.

As per earlier reports, the UAE has plans to invest nearly $25 billion on gas development projects in the next five years.

The UAE is swiftly developing its own gas sector – in May this year, Royal Dutch Shell won a multi-billion-dollar project to develop the Bab sour gas field with Abu Dhabi National Oil Company (ADNOC). The Bab field has been valued at around $10 billion.