KSA braces for summer air conditioning demand

Updated 01 May 2013
0

KSA braces for summer air conditioning demand

JEDDAH: Saudi Arabia faces another summer of heavy crude burning for power generation, with little more gas available and demand for cooling rising each year in the Kingdom.
Roughly half of Saudi gas supply still comes from its vast oil fields, so summer air conditioning demand supports high oil output levels because the Kingdom needs more of both fuels for its power stations.
There have been no big gas fields brought online since the Karan project ramped up production in 2012, and it is unclear whether this independent gas field will be able to run at full flow this summer.
Petroleum and Mineral Resources Minister Ali Al-Naimi said on April 1 that Karan should be running at capacity “very soon,” but it is not clear whether it has been running below capacity because spring power demand was low or because it was still unable to run flat out.
If Karan is able to run at full capacity all summer it should help reduce the total volume of crude burn compared to 2012, because it was not running at capacity until toward the end of last peak demand season.
Sources familiar with Saudi oil policy said recently that they expected external demand for Saudi crude to remain steady from March through June 2013.
But crude demand by Saudi power plants is set to surge from now until July, with a rise of 356,000 barrels per day seen from March-June 2011 and a jump of 400,000 bpd in the same period of 2012, government data published through the Joint Organizations Data Initiative (JODI) shows.
So if crude export demand does remain steady, the inevitable Saudi oil demand jump means output will have to rise significantly.
If Asian demand for Saudi crude falters, the surge in domestic demand should still support production, especially as any reduction in output would deal a double blow of depriving industry of gas feedstock while condemning even more oil to burn in power plants because there is less associated gas.
Riyadh has long insisted that it adjusts oil supply to meet demand and not to steer prices.
With Brent crude trading at around $ 104 a barrel on April 30, but the world economy still seen as fragile, Saudi oil policy makers will be wary of raising production significantly to meet their own demand.
They had hoped Karan would dampen the annual crude burning bonanza last year, but exceptionally hot weather forced record volumes of Saudi oil into power plant furnaces last summer.
Were it not for Karan, combined with near record high crude output pumping out more associated gas, oil burning would have exceeded the record 763,250 barrels a day (bpd) used in power plants from June through September last year.
Using stocks to meet the air-conditioning driven demand surge would avoid having to raise production above current levels of around 9.2 million bpd — a move which risks driving oil prices well below Saudi Arabia’s stated preferred level of around $ 100 a barrel.
Saudi oil strategists will have to weigh the benefits of using crude stocks instead of raising well head production — considering that using stocks means less potential gas supplies from oilfields, which will further increase the amount of crude it needs to burn to keep the growing population cool.
But as most oil traders do not find out about production levels until the next month, and because export volumes have greater influence over prices the Kingdom could raise output if it needs the oil without immediately impacting prices or increasing exports.
But there is still some uncertainty over how much gas Karan will be able to supply, with one part of Saudi Aramco’s website saying it hit full capacity of 1.8 billion cubic feet per day (bcf/d) in summer 2012, and another saying the processing plant will reach full capacity by 2013.
Saudi oil officials and Saudi Aramco spokespeople were unable to comment immediately on Karan’s operational status.
A sharp rise in oil production from May to June 2011 enabled Saudi Arabia to satisfy its own surge in oil demand and boost exports to compensate for a fall in supplies during the Libyan civil war.
A 1 million bpd hike in oil output from May to 9.8 million bpd in June 2011 also helped reduce its crude burn by making more associated gas available.

There is little evidence of it relying on stocks before and stock withdrawals do not offer the extra gas that pumping oilfields harder does.
Saudi oil exports have fallen relative to production in three of the four summers since 2009, when domestic demand has eaten into exports each year, JODI data shows.
Meanwhile, stock withdrawals have remained relatively low, indicating that Saudi stocks have not been heavily used to support exports over summer.
Saudi electricity use has risen by about 6 percent annually over the last decade, with summer peak demand more than doubling from 2002 to over 48 gigawatts in 2011, according to the national electricity regulator.


Disney again makes history with takings above $7bn for 2018

Updated 11 December 2018
0

Disney again makes history with takings above $7bn for 2018

  • Box office gross marks second biggest year for Disney
  • Latest offering "Mary Poppins Returns" expected to dominate box office

LOS ANGELES: Walt Disney Studios is again ending the year on a high note, posting more than $7 billion in global box office earnings, thanks to hits such as "Black Panther" and "Avengers: Infinity War."
"This is only the second time in history any studio has surpassed the $7 billion mark, after Disney's own industry-record 2016 global gross of $7.6 billion," the company said in a statement on Monday.
"The Studios' estimated international box office gross through December 9 is an estimated $4.069 billion, marking our second biggest year and the third biggest in industry history," it added.
Disney's success comes as the studio is set to release "Mary Poppins Returns" on December 19, which is expected to top the box office during the holiday season.
"To date, four of the top eight worldwide releases of the year are from The Walt Disney Studios, including the top two global and top three domestic releases," the company said.
"Avengers: Infinity War," made by Disney's Marvel subsidiary, led the way, earning $2 billion alone. It is followed by superhero movie "Black Panther," which earned $1.35 billion worldwide.
"Incredibles 2," made by Pixar, another Disney subsidiary, earned $1.24 billion.
Other top box office earners for 2018 are "Ant-Man and The Wasp," "Solo: A Star Wars Story," and "Ralph Breaks the Internet," which has held the number one spot at the North American box office for the third consecutive week.