Aramco moves ahead with wind and gas projects to cut domestic oil use

Saudi Aramco is making deals on wind and gas energy to reduce domestic oil use.

Saudi Arabia;s wind and gas projects highlight the country's commitment to renewable energy. Lee Hoagland/ The National
Powered by automated translation

Saudi Arabia’s state oil company, Saudi Aramco, announced a major new gas plant contract and took delivery of the kingdom’s first wind turbine this week, as it moved ahead with plan to cut domestic oil consumption for power generation.

The company yesterday announced that it had signed a US$900 million engineering, procurement and construction (EPC) deal with South Korea’s Doosan Heavy Industries and Construction for its 1.5 gigawatt (GW) combined heat and power plant at Fadhili, which is being developed in the Eastern Province to exploit associated gas from an adjacent oilfield.

Aramco said on Sunday it had taken delivery of a GE 2.75-120 wind turbine, which will be used as a demonstration installation to displace diesel at its power plant at Turaif, in the far north near its border with Jordan, where conditions are best for testing.

The two projects highlight Saudi Arabia’s commitment to renewable energy while emphasising that natural gas is the main driver of its energy diversification plans.

“The intention for renewables is there but like the rest of the Gulf, it is making a really aggressive push towards getting more gas,” said Steve Griffiths, the vice president for research at the Masdar Institute of Science and Technology in Abu Dhabi.

The Saudi economic road map, Vision 2030, this year set a goal of 9.5GW for all renewables by 2023, with solar to provide 3.45GW. That compared with the old King Abdullah City for Atomic and Renewable Energy plan, which foresaw 41GW of generating capacity for solar alone by 2032, with more than half to be up and running by 2020.

Saudi Arabia also scaled back its target for the share of renewables in its energy mix, from 50 to 10 per cent, while sharply raising its target for natural gas’s share to 70 from 50 per cent.

Huntak Kim, Doosan EPC division’s chief executive, said: “The cogeneration plant will enhance the overall energy efficiency of the Fadhili gas plant (and) will give Doosan an increased advantage to deliver more of its advanced power solutions and services where 40,000MW of power capacity increase from combined heat and power plants is planned by 2024.”

GE said it expects to start generating electricity from its giant turbine – with a wing span of 120 metres, or 50 per cent wider than an Airbus 380 – next month. The output will be modest – displacing about 18,600 barrels of diesel a year – but the turbine has digital equipment that will allow GE and Aramco to analyse wind conditions and turbine efficiency.

“It highlights that wind energy generation in the kingdom is real and heralds a new era of renewable energy that clearly shows to the world that action is being taken to support the renewable goals of Vision 2030,” said Hisham Albahkali, GE’s Saudi Arabia country head.

Despite the world glut in natural gas, which has depressed prices and pushed up demand from Gulf countries, “the Saudi commitment to renewables seems pretty much still in tact,” said Mr Griffiths. “But the projects need to start evolving a little quicker” to meet targets.

Follow The National's Business section on Twitter