OPEC forecasts lower oil demand growth in 2022

OPEC forecasts lower oil demand growth in 2022
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Updated 11 August 2022

OPEC forecasts lower oil demand growth in 2022

OPEC forecasts lower oil demand growth in 2022

RIYADH: The Organization of the Petroleum Exporting Countries has trimmed its forecast of oil demand growth in 2022 for the third time since April. 

In its “Monthly Oil Market Report,” OPEC noted that the cut in growth forecast is attributed to the economic impact due to Russia’s invasion of Ukraine, along with the effects of high inflation. 

The organization expects oil demand to rise by 3.1 million barrels per day, down 260,000 bpd from the previous forecast of 3.36 million.

OPEC added the demand growth for 2023 will slow further to 2.7 million bpd, leaving its forecast unchanged from last month.

The report further said the global oil market is strongly rebounding to pre-COVID-19 levels.

The monthly report revealed that OPEC output in July rose by 162,000 bpd to 28.84 million bpd.

While the 2023 outlook for overall non-OPEC supply was left steady, OPEC sees a slight acceleration in US shale growth.

Supply of US tight oil, another term for shale, is expected to rise by 800,000 bpd in 2023, up from 740,000 bpd in 2022, although this year’s forecast was revised down.

(With input from Reuters)


Saudi Royal Commission signs $1.9bn investment agreements with INEOS Europe

Saudi Royal Commission signs $1.9bn investment agreements with INEOS Europe
Updated 12 sec ago

Saudi Royal Commission signs $1.9bn investment agreements with INEOS Europe

Saudi Royal Commission signs $1.9bn investment agreements with INEOS Europe

RIYADH: Saudi Arabia’s Royal Commission for Jubail and Yanbu has signed SR7.5 billion ($1.9 billion) worth of investment agreements with the chemical company INEOS Europe to build two factories in Jubail Industrial city. 

With a value of SR3.75 billion, the first agreement will establish a factory for the production of alpha-olefin and hydrocarbon derivatives, with a total area of 180,019 square meters in the Plascim area in Jubail Industrial city, according to the Saudi Press Agency. 

The second contract, which is valued at SR3.75 billion, is to create a factory for the production of acrylonitrile, acetonitrile and hydrogen and sodium cyanide with an area of 334,224 square meters in the Plascim area. 

The contracts come as part of Saudi Arabia’s industrial strategy to attract value-added manufacturing industries in order to raise the percentage of local content in these industries.


Saudi Arabia raises the bar in green hydrogen production: KAPSARC

Saudi Arabia raises the bar in green hydrogen production: KAPSARC
Updated 54 min 52 sec ago

Saudi Arabia raises the bar in green hydrogen production: KAPSARC

Saudi Arabia raises the bar in green hydrogen production: KAPSARC

RIYADH: Given its resources, infrastructure and land, Saudi Arabia is placed at a very competitive position in the green hydrogen industry, especially in terms of cost and volume capacity of the product, according to Rami Shabaneh, a King Abdullah Petroleum Studies and Research Center researcher.

Global prices of hydrogen range between $2 and $7 per kg. The Kingdom falls at the lower end of the cost curve due to low natural gas and renewable electricity prices locally.

“In Saudi Arabia, it is much lower because of the low-cost resources and high capacity factors the electrolyzers can achieve. A recent study by KAPSARC shows that reaching $1 per kg is plausible in the long term,” Shabaneh told Arab News.

“Other countries can achieve a similar levelized cost of hydrogen production, but only a few can produce the volumes required to meet the decarbonization targets,” he added.

The cost of green hydrogen is highly sensitive to renewable electricity costs and electrolyzer load factors.

“The renewable energy prices in the Kingdom are some of the lowest in the world. An auction price accepted at $10.4 per MWh is a world record low right now,” he said.

KAPSARC analyzes the resource, export and cost reduction potential of Saudi Arabia’s hydrogen production.

According to Shabaneh, despite significant decreases in hydrogen costs, the world still needs supporting mechanisms for hydrogen to substitute for traditional fuels in some sectors.

He further pointed out that having fossil fuels in the Kingdom’s energy system does not necessarily mean more emissions.

“You can still use fossil fuels to make blue hydrogen with high capture rates of GHG emissions,” he said.

Saudi Arabia is building a $5 billion green hydrogen project in NEOM, powered by renewable energy, to supply 650 tons of carbon-free hydrogen daily. The plant will see its first production in 2026.

The project will export hydrogen in the form of liquid ammonia to the world market for use as a biofuel that feeds transportation systems.

The plant will need around 4.3 gigawatts of clean energy to power it, as ACWA Power, one of three project owners, plans to use solar during the day and wind at night to eliminate the need for batteries and expensive storage solutions.

 


Abu Dhabi power transmission project secures $3.2bn financing

Abu Dhabi power transmission project secures $3.2bn financing
Updated 29 September 2022

Abu Dhabi power transmission project secures $3.2bn financing

Abu Dhabi power transmission project secures $3.2bn financing

DUBAI: Abu Dhabi Offshore Power Transmission Company has secured more than $3.2 billion in financing with export credit agencies and banks for an offshore electricity transmission project, the Japan Bank for International Cooperation said in a statement.

The financing is to build and operate a high-voltage direct current offshore power transmission system linking two offshore production facilities owned by state-controlled oil giant Abu Dhabi National Oil Company to Abu Dhabi’s onshore grid.

Japan Bank for International Cooperation provided $1.201 billion for the direct current transmission project. The remaining $2 billion was financed by Export-Import Bank of Korea, Mizuho, Sumitomo Mitsui Banking Corporation, BNP Paribas Fortis and Standard Chartered, JBIC said in the statement on Wednesday.

“The project will receive payment of power transmission charges from ADNOC for 35 years after the construction has been completed,” JBIC said.

ADNOC and JBIC signed a memorandum of understanding in November to cooperate on decarbonization, energy transmission and energy efficiency.

JBIC said the project was in line with the United Arab Emirates’ commitment in October last year to cut carbon dioxide emissions to net zero by 2050.


OPEC+ has begun talks on output cut for Oct. 5 meeting, source tells Reuters

OPEC+ has begun talks on output cut for Oct. 5 meeting, source tells Reuters
Updated 29 September 2022

OPEC+ has begun talks on output cut for Oct. 5 meeting, source tells Reuters

OPEC+ has begun talks on output cut for Oct. 5 meeting, source tells Reuters

DUBAI: Leading members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have begun discussions about an oil output cut when the group meets on Oct. 5, according to Reuters.

One OPEC source told Reuters a cut is “likely” and two other OPEC+ sources said key members had spoken about the topic. 

A source familiar with Russian thinking told Reuters earlier this week that Moscow could suggest a cut of up to 1 million barrels per day.

The latest comments suggest that key OPEC members have started communicating over the matter, although the volume of any potential cut is still unclear.

Next week’s meeting takes place against a backdrop of falling oil prices from multi-year highs hit in March, and severe market volatility.

OPEC+, which combines OPEC countries and allies such as Russia, agreed a small oil output cut of 100,000 barrels a day at its September meeting to bolster prices.

Top OPEC producer Saudi Arabia flagged in August the possibility of output cuts to address market volatility. 

Also at the group’s last meeting, OPEC+ members agreed to stick to their forecasts for robust global oil demand growth in 2022 and 2023, citing signs that major economies were faring better than expected despite headwinds such as surging inflation.

Oil demand will increase by 3.1 million barrels per day in 2022 and by 2.7 million bpd in 2023, unchanged from last month, OPEC said in its monthly report.

 


TASI extends gain as global recession fears fizzle out: Opening bell

TASI extends gain as global recession fears fizzle out: Opening bell
Updated 29 September 2022

TASI extends gain as global recession fears fizzle out: Opening bell

TASI extends gain as global recession fears fizzle out: Opening bell

RIYADH: Saudi Arabia’s main index rose in early trade on Thursday, extending gains from the previous session as investors brushed off fears of a global recession.

The Tadawul All-Share Index grew 1.22 percent to reach 11,306, while the parallel market Nomu started flat at 19,922, as of 10:08 a.m. Saudi time.

Saudi oil giant Aramco began with a 1.29 percent gain, while Rabigh Refining and Petrochemical Co. climbed 1.15 percent.

The Saudi National Bank, the Kingdom’s largest lender, increased by 1.46 percent, while Saudi British Bank rose 4.18 percent.

The Kingdom’s highest valued bank, Al Rajhi, went up 0.88 percent, while Alinma Bank gained 1.57 percent.

Saudi Basic Industries Corp. rose 0.34 percent, as it announced the resignation of its CEO Yousef Al-Benyan to serve as Education Minister, and appointed Abdulrahman Al-Fageeh as acting CEO.

Retal Urban Development Co. fell 0.14 percent, after it sold its 50 percent stake in a land plot in Al Khobar for SR113 million ($30 million).

Arriyadh Development Co. added 0.29 percent, after it declared a cash dividend of SR0.25 per share for the first half of 2022.

Ladun Investment Co. gained 0.78 percent, after it completed the process of acquiring raw lands in Riyadh.