Inform Prize Cegal magazine 2024 events 2024 events Inform prize
Middle East Energy Review - July 2024

Middle East Energy Review - July 2024

 

OPEC reiterated its forecast of robust oil demand growth in the summer and the whole of 2024, while the biggest national oil companies in the Middle East moved to significantly expand their international footprint in the LNG industry.

 

OPEC Maintains Robust Oil Demand Growth Forecast

In its monthly report in July, OPEC revised up slightly its outlook for global economic growth and kept its forecast of strong oil demand growth this year.

The 2024 global oil demand growth forecast remained unchanged at 2.2 million barrels per day (bpd) compared to the previous month’s assessment. The OECD oil demand in 2024 is expected to expand by around 200,000 bpd, while the non-OECD demand is set to grow by around 2.1 million bpd. In 2025, global oil demand is expected to see robust growth of 1.8 million bpd year-over-year, also unchanged from the previous month’s forecast.

There were some downward adjustments for the first quarter of 2024 due to actual data from the OECD region, but this was offset by a better-than-expected performance in the same quarter in some non-OECD countries, OPEC said.

“Expected strong mobility and air travel in the Northern Hemisphere during the summer driving/holiday season is anticipated to bolster demand for transportation fuels and drive growth in the US,” said the organization dominated by the biggest oil exporters in the Middle East.

“In addition, expected improvements in manufacturing and petrochemical activities are expected to support the demand for LPG/NGL, lending additional support to oil demand in the country."

Oil demand in Europe and the Asia Pacific region is also expected to pick up this year, amid stronger mobility and improving economic development.

As a result, world oil demand is anticipated to reach 104.5 million bpd in 2024, bolstered by strong demand for air travel and healthy road mobility, including trucking, according to OPEC.

Demand will also be supported by industrial, construction, and agricultural activities in non-OECD countries. In addition, petrochemical capacity additions in the non-OECD region– mostly in China and the Middle East – are expected to contribute to oil demand growth.

 

 

Saudi Aramco and ADNOC Boost LNG Capabilities

Saudi state oil giant Aramco and Abu Dhabi’s national company ADNOC have announced in recent weeks a number of deals to expand their domestic gas offering and global footprint in the liquefied natural gas (LNG) sector.

Aramco has awarded contracts worth more than $25 billion to progress its strategic gas expansion, which targets sales gas production growth of more than 60 percent by 2030, compared to 2021 levels.

The contracts relate to phase two development of the huge Jafurah unconventional gas field, phase three expansion of Aramco’s Master Gas System, new gas rigs, and ongoing capacity maintenance.

The company has awarded 16 contracts, worth a combined total of around $12.4 billion, for phase two development at Jafurah. The work will involve construction of gas compression facilities and associated pipelines, expansion of the Jafurah Gas Plant including construction of gas processing trains, and utilities, sulfur and export facilities.

The Jafurah unconventional gas field is estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion Stock Tank Barrels of condensate. Aramco expects total overall lifecycle investment at Jafurah to exceed $100 billion and production to reach a sustainable sales gas rate of two billion standard cubic feet per day by 2030, in addition to significant volumes of ethane, NGL, and condensate.

Another 15 lump sum turnkey contracts, worth a combined total of around $8.8 billion, have been awarded to commence the phase three expansion of the Master Gas System, which delivers natural gas to customers across the Kingdom of Saudi Arabia.

Additionally, 23 gas rig contracts worth $2.4 billion have also been awarded, along with two directional drilling contracts worth $612 million.

The Saudi firm also announced a non-binding Heads of Agreement (HoA) with US company NextDecade Corporation for a 20-year liquefied natural gas agreement for offtake from Train 4 at NextDecade’s Rio Grande LNG Facility at the Port of Brownsville, Texas, USA.

Aramco expects to purchase 1.2 million tonnes per annum (MTPA) of LNG for 20 years on a free on board basis, at a price indexed to Henry Hub. Aramco and NextDecade are currently in the process of negotiating a binding agreement, and once executed, the effectiveness of the deal will be subject to a positive Final Investment Decision on Train 4.

In another deal with a US company, Saudi Aramco signed a similar heads of agreement with Sempra for a 20-year LNG offtake of 5.0 million tonnes per annum from the Port Arthur LNG Phase 2 expansion project. The agreement further contemplates Aramco taking a 25-percent participation in the project-level equity of Phase 2.

“As a potential strategic partner in the Port Arthur LNG Phase 2 project, Aramco is well placed to grow its gas portfolio with the aim of meeting the world’s growing need for lower-carbon sources of energy,” said Nasir K. Al-Naimi, Aramco Upstream President.

“This agreement is a major step in Aramco’s strategy to become a leading global LNG player.”

In the United Arab Emirates, ADNOC announced in June the final investment decision for the Ruwais LNG project, which will be located in Al Ruwais Industrial City in Al Dhafra region of Abu Dhabi. This will be the first LNG export facility in the Middle East and North Africa (MENA) region to run on clean power, making it one of the world’s lowest-carbon intensity LNG plants, ADNOC says.

A few weeks after the FID, the Abu Dhabi company signed agreements with bp, Mitsui & Co., Shell, and TotalEnergies for each to be awarded a 10-percent stake in the Ruwais LNG project. ADNOC will retain a 60-percent interest.

Separately, ADNOC has signed several new long-term LNG sales commitments with international partners, including for the delivery of 1 mtpa with Shell and 0.6 mtpa with Mitsui & Co., taking the committed Ruwais LNG production capacity to 70 percent.

“As natural gas demand continues to increase, this world-class project will enable us to provide more lower-carbon gas to meet growing demand today while helping the world transition to a cleaner energy future,” said Sultan Ahmed Al Jaber, ADNOC Managing Director and Group CEO.

Shell's CEO Wael Sawan commented, “In line with our strategy to create more value with less emissions, we are investing in additional LNG capacity and further growing our world-leading LNG portfolio, with energy-efficient and carbon-competitive projects.

In the field of technology to assist energy operations, ADNOC and global technology group e& announced in early July a strategic project to build the energy industry’s largest private 5G wireless network, spanning 11,000 square kilometres. The 5G network will deliver high-bandwidth connectivity across ADNOC’s onshore and offshore operations, enabling the company to further integrate its advanced artificial intelligence (AI) solutions at its most remote facilities and reduce costs through automation, improve efficiency, minimize emissions, and enhance the safety of its people.

In Qatar, state firm QatarEnergy backed the initiative of interim dividends distribution by the companies that are listed on Qatar Stock Exchange in which QatarEnergy is a shareholder, as part of its commitment to maximise the value to shareholders.

QatarEnergy has also entered into a long-term agreement to supply Haldia Petrochemicals Limited (HPL) – one of India’s largest petrochemical companies, utilizing naphtha as its primary feedstock – with a total of up to two million tons of naphtha to be delivered over ten years starting in the second quarter of 2024.

QatarEnergy struck a similar deal with Japanese refining and petrochemical company ENEOS Corporation. Under the agreement, QatarEnergy will supply ENEOS with up to 9 million tons of naphtha over 10 years starting July 2024.

 

Read the latest issue of the OGV Energy magazine HERE

Published: 09-08-2024

OGV Energy will use the information you provide on this form to be in touch with you and to provide updates and marketing. Please let us know all the ways you would like to hear from us:

OGV Magazine 83 wellpro