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Energy Sources, Part A: Recovery, Utilization, and Environmental Effects

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The natural gas potential of Saudi Arabia Ayhan Demirbas, Hemaid Alsulami & Abdul-Sattar Nizami To cite this article: Ayhan Demirbas, Hemaid Alsulami & Abdul-Sattar Nizami (2016) The natural gas potential of Saudi Arabia, Energy Sources, Part A: Recovery, Utilization, and Environmental Effects, 38:18, 2635-2642, DOI: 10.1080/15567036.2015.1070218 To link to this article: http://dx.doi.org/10.1080/15567036.2015.1070218

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Date: 10 October 2016, At: 01:09

ENERGY SOURCES, PART A: RECOVERY, UTILIZATION, AND ENVIRONMENTAL EFFECTS 2016, VOL. 38, NO. 18, 2635–2642 http://dx.doi.org/10.1080/15567036.2015.1070218

The natural gas potential of Saudi Arabia Ayhan Demirbasa, Hemaid Alsulamia, and Abdul-Sattar Nizami

b

a

Faculty of Engineering, Department of Industrial Engineering, King Abdulaziz University, Jeddah, Saudi Arabia; Center of Excellence in Environmental Studies (CEES), King Abdul Aziz University, Jeddah, Saudi Arabia

b

ABSTRACT

KEYWORDS

Kingdom of Saudi Arabia (KSA) has the fourth largest natural gas (NG) reserves in the world. One third of these reserves are located in the Ghawar region of Eastern Province. NG production is controlled tightly due to close conjunction with oil production until recently. KSA’s NG production of 85 billion cubic meters in 2015 from 70 billion cubic meters in 2008 sets an average annual increase of 2.7%. More than half of the annual KSA’s NG production has been accompanied by gas. The Saudi Gas Initiative (SGI) aims to increase foreign investment in the NG development sector through petrochemicals, power generation, and gas development while integrating with salt water desalination. The barriers in the success of motor fuel policies include high initial capital costs, lack of information or skills, less market acceptance, technology limitations, and financing risks. This article aims to review the potential of NG as an alternative to oil and coal in KSA in meeting the country’s high energy requirements.

Gas development; Kingdom of Saudi Arabia (KSA); natural gas (NG); power generation; Saudi gas initiative (SGI)

Introduction Natural gas (NG) has become the world’s fastest-consumed primary energy source over the last few decades. The annual consumption of NG is estimated to increase at an average rate of 2.8% from 2001 to 2025, in comparison to the annual growth rates of 1.8% and 1.5% for oil and coal, respectively (Demirbas, 2006). NG is consumed in commercial, transportation, industry, housing, and electricity generation sectors (Yazici and Demirbas, 2001; Khan and Al-Shehhi, 2015). However, the overall utilization of NG is smaller than the global market for oil due to transportation cost and low energy contents (Hacisalihoglu, 2008). The Kingdom of Saudi Arabia (KSA) is the world’s largest manufacturer, exporter, and consumer of the total petroleum liquids and primary energy (Rahman and Khondaker, 2012). In 2013, KSA was the world’s 12th largest primary energy consumer with the total energy consumption of 9 quadrillion British thermal units (Btu) (US-EIA, 2014). The KSA’s economy is heavily depending on oil production (Al-Sahlawi, 1997). The country’s own demand for oil and gas is increasing significantly every year at an average rate of 7%. Oil defines and dominates the KSA economy (Al-Sahlawi, 1997). Oil and NG represented 23% of real gross domestic product (GDP), including 91% of government income, and 86% of export earnings in 2010 (Andrews and Playfoot, 2015). In various countries, more than a million miles of pipelines safely deliver trillions of cubic feet of petroleum products every year. Therefore, the pipeline systems are the safest means to move liquid and gaseous fuels (Demirbas, 2010). KSA’s NG demand has increased by 23% from 2010 to 2015, which is further expected to increase by 24.6% till 2020. This article aims to review

CONTACT Ayhan Demirbas [email protected] Faculty of Engineering, Department of Industrial Engineering, King Abdulaziz University, P.O Box: 80216, Jeddah 21589, Saudi Arabia. © 2016 Taylor & Francis Group, LLC

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the potential of NG as an alternative oil and coal fuel in KSA. The location and applications of NG in meeting the KSA’s high energy requirements are further evaluated.

Natural gas in the world Table 1 shows the world proved NG reserves and its annual production and consumption until 2013. The largest NG producer is Europe and Eurasia, which are also the largest supplier of NG to European and Eurasian countries. The Middle East is the third largest NG producer and consumer after North America. The Asia Pacific imports NG to meet their energy demands. The other regions are relatively minor NG producers and consumers (Demirbas 2006, 2010). NG can be located anywhere in the world, but the largest reserves are in the former Soviet Union and the Middle East. Since the 1970s, the discovered world’s NG reserves are increasing each year. NG reserves by country are given in Table 2.

Chemical composition of natural gas As shown in Table 3, methane (CH4) is the largest component of the NG’s chemical composition. It is clear that CH4 represents around 95% of the total volume of NG. Other components are ethane, propane, butane, pentane, nitrogen, carbon dioxide CO2, water vapor, and traces of other gases. Moreover, sulfur compounds are present in very small amounts (Demirbas, 2010). Since CH4 is the largest component of NG, its characteristics are generally used for comparing NG properties to other conventional fuels (Demirbas, 2006). Permian Khuff reservoirs on the east coast of KSA and in the Arabian Gulf produce dry sour gas with extremely variable nitrogen concentrations (Jenden et al., 2015). The Master Gas Gathering System of Saudi Aramco is an effective step in reducing CH4 emissions from the oil and gas fields (Rahman and Khondaker, 2012). Water content in NG is estimated based on gas processing, storage, and transmission. There are several formulas and calculation methods to evaluate the water content of sweet natural gas separately (Lin et al., 2014). One of the most important usages of NG is generating electricity, even though the electricity produced from NG is more costly than using coal due to the increase in fuel prices. This is especially true for coal-rich and NG-poor nations. Nowadays, the use of NG in power production is increased as NG is considered the cleanest alternative to coal and other fossil fuels. Upon combustion, NG emits less CO2 than oil or coal, with no sulfur dioxide (SO2) and only small amounts of nitrous oxides (NOx). CO2 is a greenhouse gas (GHG), while sulfur and nitrous oxides (i.e. SOx and NOx) produced by oil and coal combustion result in acid rain. Both the carbon(C) and hydrogen(H) in CH4 combine with oxygen (O2) during combustion, giving off heat, CO2, and H2O. Coal and oil contain proportionally more C compared to NG, therefore releasing CO2. Table 1. World proved natural gas reserves and annual production and consumption at end 2013. Proved reserve Trillion cubic metres (tcm)

Production Billion cubic meters (bcm)

Consumption Billion cubic meters (bcm)

80.3 56.6 15.2 14.2 11.7 7.7 185.7

568.2 1032.9 489.0 204.3 899.1 176.4 3369.9

428.3 1064.7 639.2 123.3 923.5 168.6 3347.6

Middle East Europe & Eurasia Asia Pacific Africa North America S. & C. America Total world Source: Demirbas 2006, 2010.

ENERGY SOURCES, PART A: RECOVERY, UTILIZATION, AND ENVIRONMENTAL EFFECTS

Table 2. World natural gas reserves by country (trillion cubic meter). Russia 47.57 Iran 23.00 Qatar 14.40 Saudi Arabia 6.22 United Arab Emirates 6.00 United States 5.20 Algeria 4.50 Venezuela 4.18 Nigeria 3.50 Iraq 3.10 Turkmenistan 2.86 Australia 2.55 Uzbekistan 1.88 Kazakhstan 1.84 Netherlands 1.77 Canada 1.69 Kuwait 1.69 Norway 1.25 Ukraine 1.12 Mexico 0.84 Oman 0.82 Argentina 0.78 United Kingdom 0.74 Bolivia 0.68 Trinidad and Tobago 0.67 Germany 0.34 Indonesia 0.26 Peru 0.25 Italy 0.23 Brazil 0.22 Malaysia 0.21 Poland 0.14 China 0.14 Libya 0.13 Azerbaijan 0.13 Colombia 0.12 Ecuador 0.11 Romania 0.10 Egypt 0.10 Chile 0.099 Bahrain 0.091 Denmark 0.076 Cuba 0.071

Pakistan India Yugoslavia Yemen Brunei Hungary Thailand Papua New Guinea Croatia Bangladesh Burma Austria Syria Ireland Vietnam Slovakia Mozambique France Cameroon Philippines Afghanistan Turkey Congo Sudan Tunisia Taiwan Namibia Rwanda New Zealand Bulgaria Israel Angola Equatorial Guinea Japan Ivory Coat Ethiopia Gabon Ghana Czech Republic Guatemala Albania Tanzania

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0.071 0.065 0.048 0.048 0.039 0.037 0.036 0.035 0.034 0.030 0.028 0.025 0.024 0.020 0.019 0.014 0.013 0.011 0.011 0.010 0.010 0.009 0.009 0.009 0.008 0.008 0.006 0.006 0.006 0.006 0.004 0.004 0.004 0.004 0.003 0.003 0.003 0.003 0.003 0.003 0.003 0.002

Source: Demirbas 2006, 2010.

Table 3. Chemical composition of NG. Component volume) Methane Ethane Propane iso – Butane normal – Butane iso – Pentane normal – Pentane Hexanes plus Nitrogen Carbon Dioxide Oxygen Hydrogen Source: Demirbas 2006, 2010.

Typical analysis (% by volume) 94.9 2.5 0.2 0.03 0.03 0.01 0.01 0.01 1.6 0.7 0.02 trace

Range (% by 87.0–96.0 1.8–5.1 0.1–1.5 0.01–0.3 0.01–0.3 trace–0.14 trace–0.14 trace–0.06 1.3–5.6 0.1–1.0 0.01–0.1 trace–0.02

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In the future, concerns about acid rain, urban air pollution, and global warming likely will motivate the usage of NG instead of coal and oil. The burns of NG are clean than gasoline or diesel, as it produces fewer NOx, unburned hydrocarbons, and particulates (Demirbas, 2006). To use the NG in running vehicles, a large storage tank is needed (Demirbas, 2010).

Evironmental consideration Combustion of NG is clean and emits less CO2 than all other oil derivatives, which makes it favorable in terms of GHG emission savings Global warming has been increasing gradually due to CO2 emissions. The gases with higher heat capacities than those of O2 and N2 cause the GHG phenomenon. CH4 þ 2O2 ! CO2 þ 2H2 O 1:00 g

2:75 g

2C4 H10 þ 13O2 ! 8CO2 þ 10H2 O 1:00 g

(2)

3:03 g

C þ O2 ! CO2 1:00 g

(1)

(3)

3:66 g

As shown in Eq. (1), NG is the lowest accountable for CO2 emissions among the fossil fuels. It is clear that NG is the cleanest fossil-based fuel. While liquefied petroleum gas (LPG) causes higher CO2 emissions than that of NG (Eq. 2). Collectively, the highest amount of CO2 appears according to Eq. (3) (Demirbas, 2006). Therefore, accountability of fossil fuels for global warming increases with increasing its carbon number. Moreover, the overall CO2 emissions can be decreased by biomass combustion since it is a CO2 neutral fuel source (Demirbas, 2010). The combustion of NG is the lowest among carbon intensive fossil fuels (Davies, 2001), thus reducing the pollution in comparison with other conventional fossil fuels. Exhaust emissions from natural gas vehicles (NGVs) are much lower than gasoline-powered vehicles. For example, NGV emissions of carbon monoxide (CO) is around 70% lower, non-methane organic gas emissions are 89% lower, and NOx are 87% lower (Demirbas, 2010). In addition to the reduction in pollutants, NGVs also emit lower amounts of GHGs and toxins in comparison with gasoline vehicles. Dedicated NGVs produce little or no evaporative emissions during fueling in comparison with gasoline vehicles, where they account for at least 50% of a vehicle’s total hydrocarbon emissions. Dedicated NGVs can also reduce CO2 exhaust emissions by almost 20%. Diesel exhaust is under review as a hazardous air pollutant (Demirbas, 2010). NG’sexcellent effect on environmental pollution needs to be dealt with carefully and economically (Demirbas, 2006). Integrated development and efforts to reduce GHG emissions by the public and private sector is essential for the implementation of appropriate strategies in KSA (Rahman and Khondaker, 2012; Nizami et al., 2016; Nizami et al., 2015a,b; Ouda et al., 2016).

NG potential and production in Saudi Arabia KSA’s estimated NG reserves are 6.22 trillion cubic meters (tcm), which placed the country at number four in the world, after Russia, Iran, and Qatar for the total NG reserves (IEA, 2010). Around 60% of KSA’s current NG reserves consist of associated gas, mainly from the onshore Ghawar field and the offshore Safaniya and Zuluf fields (WN, 2005). One third of these reserves are located in the Ghawar. NG production is controlled tightly due to close conjunction with oil production until recently (WN, 2005).

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Most new NG reserves were discovered in the 1990s, which contain light crude oil, especially in the Najd region (south of Riyadh). Most of KSA’s non-associated gas reserves are located in the deep Khuff reservoir, which underlies the Ghawar oil field (WN, 2005): Mazalij Al-Manjoura Shaden Niban Tinat Al-Waar, etc. NG is also located in Midyan (extreme northwest) and in the Rub al Khali (country’s southeastern desert). NG from 23 wells at the Fazran located near Dhahran was discovered (WN, 2005). Another big NG area called Durra (sea Saudi, Kuwait Divided Zone) is located near the Khafji oil field. Un-demarcated maritime border between Kuwait and Iran remains, but KSA and Kuwait agreed in July 2000 to share Durra equally (WN, 2005). Saudi Aramco has discovered a new gas field in the Eastern Province; the wall is known as Zamlah-1 (WN, 2005). The Saudi Gas Initiative (SGI) aims to increase foreign investment in NG sector development in petrochemicals, power generation, and gas development while integrating with salt water desalination. The SGI has been seen as the key player to the whole foreign investment strategy. After the cancellation of SGI, KSA earlier offered a better rate of return for smaller and more focused projects of the contract. At the same time, KSA has moved away from the integrated upstream/downstream gas, water, electricity, and petrochemical nature of the SGI (WN, 2005). Currently, non-associated NG production in KSA comes from the Khuff area beneath the Ghawar and the Abqaiq oil fields, while the accompanied gas is obtained mainly from the Ghawar area, but also from the Safaniya, Zuluf, and Abqaiq fields (IEA, 2010).

KSA gas initiative In October 2002, construction giant Ghawar close to oil fields in southern Dhahran and Riyadh Hawiyah spent $4 billion in completing a non-associated gas processing plant (WN, 2005). Hawiyah, with more than 10 years, represents the largest Saudi NG project and the first deep Jauf and Khuff reservoirs to handle only non-associated gas. On November 15, 2003, KSA reached total agreement with Royal Dutch/Shell and Total on Blocks 5-9 and 82-85 in the Shaybah and Kidan fields of the Empty Quarter region (WN, 2005). In March 2005, Saudi Aramco invited bids to expand Hawiyah to obtain additional petrochemical feedstock and primarily natural gas liquids (NGLs) from NG. NGL are naturally occurring components found in NG including ethane, propane and butane, among other valuables. Hawiyah and Foster Wheeler spent $2 billion in building a new NG processing plant at Haradh, which was completed in the 2004 summer. Haradh processes are not associated with NG (both sweet and sour) from the four areas in the Khuff formation (WN, 2005). KSA is the biggest exporter of LPG in the world. The LPG was exported to Japan until the 1970s. The refinery LPG exports to Ras Tanura, which began in 1961. KSA’s NG production of 85 billion cubic meters in 2015 from 70 billion cubic meters in 2008, set an average annual increase rate of 2.7%. More than half of the annual KSA’s NG production so far has been accompanied gas (IEA, 2010). The NGL plants are the older Berri, Shedgum, Utmaniyah, and Abqaiq plants, and the Haradh, Hawiyah, and Khursaniyah plants that have recently added capacity (IEA, 2010). Those plants are the Ju’aymah plant and the Yanbu plant, which are being expanded. The Ju’aymah plant is located in the Arabian Gulf, while Yanbu plant is located on the Red Sea. An NGL pipeline connects the two NGL centers (IEA, 2010). The NGL plants old Berri, Shedgum, Utmaniyah, and Abqaiq plants have added capacity Haradh, Hawiyah and Khursaniyah plants. These plants Ju’aymah plant are being expanded and Yanbu

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plants. Yanbu plants are located in the west region of Saudi Arabia while the Ju’aymah plant is located in the east region. Both plants are connected by pipelines. NGLs in KSA will grow more than two thirds of the Hawiyah NGL project. Manifa area, Karan non-associated gas area, and Arabiyah and Hasbah areas handled both gas and condensate rich gas stream by the end of 2013, while the Khursaniyah NGL plant is going to develop.

Gasoline, diesel fuel, LPG Compressed Natural Gas (CNG), and Natural Gas Liquid (NGL) There are mainly five petroleum-based motor fuels; gasoline, diesel fuel, LPG, CNG, and NGL. Gasoline is the most popular product derived from petroleum and constitutes the largest fraction obtained per barrel of crude oil (Demirbas 2006). The hydrocarbons in gasoline have a chain length of 4 to 12 carbons. Diesel fuel in general is any liquid fuel used in diesel engines, whose fuel ignition takes place without spark as a result of compression of the inlet air mixture and then injection of fuels. Diesel fuel consists of hydrocarbons of a chain length between 8 and 21 carbon atoms. Diesel has higher energy content per volume than gasoline (Demirbas et al., 2016). The gaseous fuels like hydrogen, LPG, CNG, or liquefied natural gas (LNG) can be used for vehicles (Kuwahara et al., 2000; Shahad and Mohammed, 2000). The total energy stored of gaseous fuels per unit volume is less than the liquid fuels (van Ling, 1992; Heaton and van der Weide, 1993; Ergeneman et al., 1999). LPG is a mixture of gases produced commercially from petroleum and stored under pressure to keep it in a liquid state. The boiling point of LPG varies from 229 K to 273 K, thus the pressure required to liquefy it is considerable and its container must be of heavy steel (Demirbas, 2010). Ventilation must be provided in CNG vehicle maintenance garages and vehicle storage buildings through ceiling exhaust systems to prevent hazardous CNG accumulations (Balat, 2005). In vehicle operation, as the pressure regulators reduce CNG pressure, the temperature will drop, causing water vapor in the NG to condense (Balat, 2005). CNG vehicle fueling stations normally dehydrate the NG to prevent water condensation. CO and NOx emissions are decreased 50% and 25% with LPG use instead of gasoline, respectively (Demirbas, 2002). CNG also has much lower environmental impact than other hydrocarbon fuels, when the process of its production in the fields till filling of the vehicle tanks is taken into account. The production, processing, transportation, and compression of NG to CNG fuel that is used by vehicles result in less environmental impact than the production, transportation, and processing of crude oil and the transportation of gasoline or diesel to the service stations (Balat, 2005; Rathore et al., 2016). KSA consumed 2.9 million barrels of oil per day (bbl/d) in 2013, almost double the consumption in 2000, because of strong industrial growth and subsidized oil prices (Alshehry and Belloumi, 2015). KSA is the world’s sixth-largest oil consumer, which consumes a quarter of oil from its own production. KSA’s domestic energy consumption currently relies exclusively on oil and NG. Oil contributed 130 million tons oil equivalent (mtoe) and contributed 93 mtoe in 2012 (BP, 2013). Foreign Affairs recently noted that KSA could consume more oil than it exports by the late 2020s. Optimization is the act of obtaining the best result under given circumstances. Practice of optimization is limited by the lack of detailed information, and the lack of time to evaluate what information is required (Demirbas et al., 2016). The residential sector of KSA consumes 50% of the total generated electricity with an annual increase rate of 8% (Farnoosh et al., 2014). Fossil fuels are the main source of electricity production (74%). The current energy generating capacity of KSA is 55 GW, which government planned to increase upto 120 GW till 2032 (Royal Decree, 2010). The combination of solar and gas extent can meet KSA future electricity demand. The economics of solar energy, wind, and nuclear power are not favorable in comparison with NG, even though KSA has significantly increased the low domestic gas prices (Ahmad and Ramana, 2014). Economic diversification is important to create sustainable economic growth. Moreover, economic diversification contributes positively to job creation. The KSA government, after every five years, issued 10 development plans since 1970 as a part of economic diversification plan (Albassam,

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2015). KSA’s fuel consumption without increasing the price for final consumers and energy systems should be explored in depth to reduce the overall fuel costs (Matar et al., 2015; Aburas, 2015).

Conclusion KSA is the world’s largest crude oil exporter and has the fourth-largest NG reserves in the world. KSA’s support of its NG industry to meet its growing energy demand and energy production and is the preferred fuel for the removal of salt from water. These new industries will create new jobs in KSA. So, NG is a key part of the long-term development and prosperity of KSA. The KSA is the biggest exporter of LPG in the world. The government has developed an energy policy that aims for diversifying energy sources and suppliers and attracting the private sector. As a result, the government has developed and implemented several energy efficiency projects, aiming to increase energy efficiency in industry, transport and residential sectors. The new motor fuel policies and barriers include aid for conventional forms of motor fuel, high capital costs, weak capital markets, missing information or skills, less market acceptance, technology limitations, financing risks and uncertainties, and a range of regulatory and institutional factors.

ORCID Abdul-Sattar Nizami

http://orcid.org/0000-0003-3294-9256

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