BMI View: Low domestic gas prices and limited foreign participation will continue to weigh on Saudi Arabia's non-associated gas development. Oil production will see incremental growth, as the kingdom looks to meet rising demand domestically and maintain stable export volumes. Fuels consumption will see strong growth, supported by increased domestic refinery output and a high level of subsidisation; however, gas consumption will remain heavily constrained by limitations in the domestic supply. Insufficient gas supply poses major risks to planned downstream expansion projects and diversification in the kingdom's power sector.
|Crude, NGPL & other liquids prod, 000b/d||11,711.0||11,631.7||11,960.4||12,118.7||12,198.9||12,412.5||12,527.5|
|Dry natural gas production, bcm||113.8||120.6||129.1||136.8||143.2||150.4||153.4|
|Dry natural gas consumption, bcm||113.8||120.6||129.1||136.8||143.2||150.4||153.4|
|Refined products production & ethanol, 000b/d||1,954.5||2,189.0||2,583.0||2,738.0||2,806.5||3,016.9||3,137.6|
|Refined products consumption & ethanol, 000b/d||2,925.0||3,027.4||3,133.3||3,258.7||3,389.0||3,507.6||3,612.9|
In an attempt to maintain crude oil export share, we expect Saudi output to remain stable over the coming year. This will see average production of about 11.8mn b/d of crude and other liquids in 2015, a marginal increase from 2014 levels.
However, we forecast a small decline in crude exports as new refining capacity is brought online, absorbing forecast production growth.
In order to support exports, the kingdom has looked to increase the role of gas in the domestic power and industrial sectors. However, domestic gas consumption remains heavily capped due to limited production growth.
In spite of Saudi Arabia's heavy focus on unconventional and onshore non-associated gas resources, we expect slow progress in developing these prospects. Domestic production will likely remain insufficient to meet unrestrained demand.
Despite inadequate domestic supply, proposals to import LNG will face major roadblocks, due to concerns over the loss of the kingdom's energy self sufficient status, low domestic gas prices and risks to domestic gas development.