Top Projects in Gulf
The leading hydrocarbon-based regions have undergone significant pressure on governments’ finances with the collapse in oil prices. Average spending dropped considerably across the energy sector. The health of the market now seems to be improving with the rebounding oil prices.
Since the OPEC meeting in late November 2016, crude oil prices have been rising and are forecast to average $53/barrel in 2017 and $56/barrel in 2018. Higher investment flows should revitalize the economy and boost the energy sector in 2017.
Across the entire energy spectrum, capital expenditure productivity is being deeply analyzed. New strategies are being formulated to shape the future of the energy sector. A prolonged period of low oil price has led to a move towards economic diversification and investment in other high-potential sectors.
Currently, several landmark energy projects are being executed in the Middle East region to embrace changing trends in the energy industry.
Saudi Arabia’s renewable energy programme is well underway to meet demand for new production capacity. It will include a mix of solar, wind and geothermal technologies. It is in line with the kingdom’s plan to generate electricity through renewable sources thus allowing more oil to be used in revenue generation and downstream diversification. Under the plan, 9.5GW of electricity is to be generated through renewable sources by 2023.
Saudi Arabia plans to tender the world’s largest oil-to-chemicals complex, with a capacity of 200,000 barrels a day, in late 2017. The complex will be developed by a joint venture of Saudi Basic Industries Corporation (Sabic) and Saudi Aramco.
The project scope involves producing more complex plastics products that can be sold in international markets. This would help in diversifying Saudi’s economy away from a reliance on crude sales. The project will also increase employment for locals by creating around 100,000 jobs.
The planned revamp of GCC’s oldest refinery in Bahrain is yet another milestone project to create additional revenues for the country and diversify its downstream income. The refinery was built in Sitra in 1936. Its modernisation, scheduled for completion in 2020, will increase its capacity by 35% and pour in billion of dollars in revenues with improved products line.
Oman’s largest hydrocarbons project – Khazzan Tight Gas Development Project – is being developed to meet rising demand for gas in the county. BP is the operator of Block 61, which includes the Khazzan-Makarem field.
The Khazzan field phase 1 project is underway and should start production by the end of 2017. It will have a production capacity of 1 billion cubic feet a day (cf/d); further addition of 500 million cf/d of gas is planned for phase 2. The project will increase Oman’s gas production capacity by upto 50% and has created an estimated 11,000 jobs for the locals.
As 2017 progresses, strengthening oil prices and diversified revenue stream is set to bring a significant momentum in the energy sector while simultaneously positioning it for future gains.