Masdar chief urges Saudi Arabia to tap wind energy

Mohamed Jameel Al-Ramahi, CEO of Masdar. (Photo courtesy: social media)
Updated 11 November 2017
0

Masdar chief urges Saudi Arabia to tap wind energy

DUBAI: Wind power represents a huge untapped source of energy for Saudi Arabia, according to the CEO of Masdar.
Saudi Arabia’s Red Sea coast enjoys attractive wind resources similar to parts of Jordan where the Abu Dhabi-based company has also helped to develop wind power, said Mohamed Jameel Al-Ramahi, CEO of Masdar, in an interview on the sidelines of a World Economic Forum event in Dubai.
But the renewable energy source may be more challenging to develop in Masdar’s UAE home, where it has also been assessing its potential.
“In the UAE, it is not feasible,” he said. “We do have certain pockets of wind corridors where we could use new technology – for example now you have slow wind turbines for slow wind speeds –that could potentially be OK for these regions – but still the pricing is not right.’
Saudi Arabia offers considerably more potential for the development of wind energy.
“In the Kingdom of Saudi Arabia, wind will play a very important role. It is blessed with a lot of resources – not only solar,’ he said.
Masdar is the region’s largest exporter of renewable energy – operating utility-scale projects as well and a player in everything from off-grid power generation in Africa to autonomous vehicles.
Al-Ramahi said that Masdar was actively targeting projects in the Kingdom, which has started to invest heavily in renewable energy as part of a broader economic reform plan aimed at reducing its reliance on oil.
The Kingdom wants to develop about 9.5 gigawatts of renewable energy by 2023 – with solar power accounting for the lion’s share.
Masdar has invested about 10 billion dirhams ($2.7 billion) in projects worldwide.


Asia’s refining profits slump as Mideast exports surge

Updated 18 min 11 sec ago
0

Asia’s refining profits slump as Mideast exports surge

  • Since 2006, the Asia-Pacific has been the world’s biggest oil-consuming region, led by industrial users South Korea and Japan along with rising powerhouses China and India
  • However, overbuilding of refineries and sluggish demand growth have caused a jump in fuel exports from these demand hubs

SINGAPORE: Asia’s biggest oil consumers are flooding the region with fuel as refining output is exceeding consumption amid a slowdown in demand growth, pressuring industry profits.
Since 2006, the Asia-Pacific has been the world’s biggest oil-consuming region, led by industrial users South Korea and Japan along with rising powerhouses China and India.
Yet overbuilding of refineries and sluggish demand growth have caused a jump in fuel exports from these demand hubs.
Compounding the supply overhang, fuel exports from the Middle East, which BP data shows added more than 1 million barrels per day (bpd) of refining capacity from 2013 to 2017, have doubled since 2014 to around 55 million tons, according to Refinitiv.
Car sales in China, the world’s second-biggest oil user, fell for the first time on record last year, and early 2019 sales also remain weak, suggesting a slowdown in gasoline demand.
For diesel, China National Petroleum Corp. in January said that it expected demand to fall by 1.1 percent in 2019. That would be China’s first annual demand decline for a major fuel since its industrial ascent started in 1990.
The surge in fuel exports combined with a 25 percent jump in crude oil prices so far this year has collapsed Singapore refinery margins, the Asian benchmark, from more than $11 per barrel in mid-2017 to just over $2.
Combine the slumping margins with labor costs and taxes and many Asian refineries now struggle to make money.
The squeezed margins have pummelled the stocks of most major Asian petroleum companies, such as Japan’s refiners JXTG Holdings Inc. or Idemitsu Kosan, South Korea’s top oil processor SK Innovation, Asia’s top oil refiner China Petroleum & Chemical Corp. and Indian Oil Corp., with some companies dropping by about 40 percent over the past year. Jeff Brown, president of energy consultancy FGE, said the surge in exports and resulting oversupply were a “big problem” for the industry.
“The pressure on refinery margins is a case of death by a thousand cuts ... Refinery upgrades throughout the region are bumping up against softening demand growth,” he said.
The profit slump follows a surge in fuel exports from China, India, Japan, South Korea and Taiwan. Refinitiv shipping data shows fuel exports from those countries have risen threefold since 2014, to a record of around 15 million tons in January.
The biggest jump in exports has come from China, where refiners are selling off record amounts of excess fuel into Asia.
“There is a risk for Asian market turmoil if (China’s fuel) export capacity remains at the current level or grows further,” said Noriaki Sakai, chief executive officer at Idemitsu Kosan during a news conference last week.
But Japanese and South Korean fuel exports have also risen as demand at home falls amid mature industry and a shrinking population. Japan’s 2019 oil demand will drop by 0.1 percent from 2018, while South Korea’s will remain flat, according to forecasts from Energy Aspects.
In Japan, oil imports have been falling steadily for years, yet its refiners produce more fuel than its industry can absorb. The situation is similar in South Korea, the world’s fifth-biggest refiner by capacity, according to data from BP.
Cho Sang-bum, an official at the Korea Petroleum Association, which represents South Korean refiners, said the surging exports had “triggered a gasoline glut.”
That glut caused negative gasoline margins in January.