Saudi Arabia, Kuwait Aim to Increase Natural Gas Production

Saudi Arabia and Kuwait aim to reduce the amount of oil it uses to generate power by utilizing natural gas instead, according to two nations' state oil companies.

"We are picking up gas exploration," Ahmad Al Sa'adi, vice president of gas operations at Saudi Aramco, said today at a conference in Doha, Qatar. "Any liquid fuel we are burning comes at the expense of our exports."

Saudi Arabia and Kuwait are currently both hampered in producing natural gas by the Organization of Petroleum Exporting Countries limits the amount of gas that can be extracted. Any gas that is currently collected is as a by-product of oil exploration.

Kuwait intends to seek gas fields within its borders and also import. Currently Kuwait uses an average of 200,000 to 300,000 barrels of oil and refined products each day to generate power.

"Our plan is to use less oil than gas," he said. "If worst comes to worst, we would continue to use the more expensive fuel," said Farouq al Zanki, chief executive officer, Kuwait Petroleum Corp at a gas supply conference in Qatar.

Saudi Arabia's domestic oil and gas use is growing faster than its economy, according to Bloomberg. Oil and gas is rising at an average of 5.9 percent annually in the past five years, the kingdom's central bank governor Muhammad al Jasser said in September. The Saudi economy, excluding oil, may expand 4.5 percent in 2010 according to the International Monetary Fund, compared with 3.3 percent in 2009.

"What is really making the difference is that domestic demand is growing," Al Sa'adi said.

Kuwait is currently producing 2.2 billion cubic feet of gas a day, which is one billion cubic feet of gas a day less than it needs, according to Sami al Rushaid, Kuwait Oil Co chairman. Kuwait currently pumps three million barrels a day.

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