niaz
PDF THINK TANK: CONSULTANT
- Joined
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Hon Indus Pakistan,
I am honoured by your post. Right or wrong my analysis follows.
For some reason, my countrymen are in the habit of getting carried away over the slightest piece of good news. Recently everyone was euphoric with the news that Exxon was on the verge of discovering oil deposits larger than Kuwaiti reserves near the Iran border. In fact, Exxon has not even started drilling and their concession is far away from Iran.
My objections, in this case, are based on two facts. First & foremost is the port restriction.
Current restrictions at Gwadar port is 12.5-meter draft which can handle up to 50K DWT bulk carries. For the record, the draft of VLCC, standard export vessel for crude, is 19 to 20 meters. Suez Canal is also 20.1-meter deep but due to its deep channel width, only vessels of max 77.5 mete Beam (width) and 160K DWT are allowed.
Smallest vessels commonly used for transporting crude (mostly in Europe) are called AFRAMAX, these have between 100 to 120 K Cargo capacity and about 14-meter draft. This is because standard crude cargo lots exported are of 500K to 600K bbl size. Thus port of Gwadar with 12.5 draft restriction would need to build 'Offshore' mooring platforms before it can receive or load large vessels. Currently, Gwadar is unsuitable for becoming a mega oil city.
The second objection is the already available surplus refining capacity of Saudi Arabia. For the benefit of the fellow members, here is the list of the refinery currently operating in Saudi Arabia.
Refineries wholly owned d by Saudi Aramco
- Jeddah oil refinery- 77 K bpd now converted to petroleum products storage.
- Yanbu oil refinery - 400 K bpd Completed in 2016 (some mention its capacity at 245K bbl per day)
- Ras Tanura Oil refinery is the oldest refineries built in 1947 at 50 k bpd. It was initially owned by Arabian American Oil Company (Aramco) - a JV between Standard Oil New Jersey–now Exxon, Standard Oil California and Texaco – now Chevron). In 1973 Saudi acquired 25% share and in 1980 nationalized the company and changed the name to Saudi Aramco). After 1980, Aramco was nationalised and became Saudi Aramco. The current capacity of Ras Tanura refinery is 550K bpd and is the largest refinery ofSaudi Arabia.
- Riyadh refinery- 120K bpd. Commissioned in1981.
- Jazan Oil refinery of 400 K bpd is scheduled to complete early 2109.
Joint venture refineries
- Petro Rabigh - 400 K bpd. Owned 37.5% by Saudi Aramco, 37.5% by Sumitomo Chemicals, and 25% by the Saudi public. Completed 2008. Phase II scheduled to complete this year.
- SASREF- Jubail. 305 K bpd built in 1985. Shareholders are Shell & Saudi Aramco.
- SATORP – Jubail 440K bpd. Completed in 2014. Jointly owned by TOTAL & Saudi Aramco.
- YASREF: Yanbu 400K bpd started full operation in 2016. Shareholders are Saudi Aramco & Sinopec.
SATORP & YASREF are wholly export refineries. ExxonMobil & Shell uplift 50% of the production form SAMREF & SAREF and sell to whomsoever they desire. Armco also exports part of Ras Tanura refinery output.
Saudi Arabia already has huge products surplus available for export.
Quote
Crude output remained under the nation’s assigned quota, but the Kingdom increased diesel and gasoline and other fuel shipments by 27 per cent to 1.912 million barrels per day in January,
Unquote
https://oilprice.com/Latest-Energy-...rabia-Boosts-Diesel-And-Gasoline-Exports.html
Therefore in my humble opinion, Gawdar Mega Oil City is nothing more than “Wishful” thinking. There is already a gas pipeline in existence from Turkmenistan to Western China. Kazakhstan has 30-billion bbl of oil reserves and transportation from Kazakhstan to China by pipeline will be far less expensive than hauling petroleum products from all the way to China by road.
China first showed interest Gwadar in 2002, it took 13 years (2015) for CPEC agreement to be signed. Let us wait and see how the Saudi interest bears fruit.
I am honoured by your post. Right or wrong my analysis follows.
For some reason, my countrymen are in the habit of getting carried away over the slightest piece of good news. Recently everyone was euphoric with the news that Exxon was on the verge of discovering oil deposits larger than Kuwaiti reserves near the Iran border. In fact, Exxon has not even started drilling and their concession is far away from Iran.
My objections, in this case, are based on two facts. First & foremost is the port restriction.
Current restrictions at Gwadar port is 12.5-meter draft which can handle up to 50K DWT bulk carries. For the record, the draft of VLCC, standard export vessel for crude, is 19 to 20 meters. Suez Canal is also 20.1-meter deep but due to its deep channel width, only vessels of max 77.5 mete Beam (width) and 160K DWT are allowed.
Smallest vessels commonly used for transporting crude (mostly in Europe) are called AFRAMAX, these have between 100 to 120 K Cargo capacity and about 14-meter draft. This is because standard crude cargo lots exported are of 500K to 600K bbl size. Thus port of Gwadar with 12.5 draft restriction would need to build 'Offshore' mooring platforms before it can receive or load large vessels. Currently, Gwadar is unsuitable for becoming a mega oil city.
The second objection is the already available surplus refining capacity of Saudi Arabia. For the benefit of the fellow members, here is the list of the refinery currently operating in Saudi Arabia.
Refineries wholly owned d by Saudi Aramco
- Jeddah oil refinery- 77 K bpd now converted to petroleum products storage.
- Yanbu oil refinery - 400 K bpd Completed in 2016 (some mention its capacity at 245K bbl per day)
- Ras Tanura Oil refinery is the oldest refineries built in 1947 at 50 k bpd. It was initially owned by Arabian American Oil Company (Aramco) - a JV between Standard Oil New Jersey–now Exxon, Standard Oil California and Texaco – now Chevron). In 1973 Saudi acquired 25% share and in 1980 nationalized the company and changed the name to Saudi Aramco). After 1980, Aramco was nationalised and became Saudi Aramco. The current capacity of Ras Tanura refinery is 550K bpd and is the largest refinery ofSaudi Arabia.
- Riyadh refinery- 120K bpd. Commissioned in1981.
- Jazan Oil refinery of 400 K bpd is scheduled to complete early 2109.
Joint venture refineries
- Petro Rabigh - 400 K bpd. Owned 37.5% by Saudi Aramco, 37.5% by Sumitomo Chemicals, and 25% by the Saudi public. Completed 2008. Phase II scheduled to complete this year.
- SASREF- Jubail. 305 K bpd built in 1985. Shareholders are Shell & Saudi Aramco.
- SATORP – Jubail 440K bpd. Completed in 2014. Jointly owned by TOTAL & Saudi Aramco.
- YASREF: Yanbu 400K bpd started full operation in 2016. Shareholders are Saudi Aramco & Sinopec.
SATORP & YASREF are wholly export refineries. ExxonMobil & Shell uplift 50% of the production form SAMREF & SAREF and sell to whomsoever they desire. Armco also exports part of Ras Tanura refinery output.
Saudi Arabia already has huge products surplus available for export.
Quote
Crude output remained under the nation’s assigned quota, but the Kingdom increased diesel and gasoline and other fuel shipments by 27 per cent to 1.912 million barrels per day in January,
Unquote
https://oilprice.com/Latest-Energy-...rabia-Boosts-Diesel-And-Gasoline-Exports.html
Therefore in my humble opinion, Gawdar Mega Oil City is nothing more than “Wishful” thinking. There is already a gas pipeline in existence from Turkmenistan to Western China. Kazakhstan has 30-billion bbl of oil reserves and transportation from Kazakhstan to China by pipeline will be far less expensive than hauling petroleum products from all the way to China by road.
China first showed interest Gwadar in 2002, it took 13 years (2015) for CPEC agreement to be signed. Let us wait and see how the Saudi interest bears fruit.
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