Top five energy stories from Saudi Arabia in 2018

As 2018 comes to an end, it’s time to take a look at the top energy-related announcements in Saudi Arabia. The Kingdom has set itself some ambitious short- and long-term goals for its energy sector, with the roll-out of mega scale projects, currently in their developments stages.

Argaam has compiled a list of the top five announcements in Saudi Arabia in 2018 that is slated to change the energy landscape in the Kingdom.

1) Saudi Arabia going nuclear

Faced with surging energy demand for economic growth, Saudi Arabia is turning to nuclear power to meet a set of challenges — how to diversify its electricity-generating mix while reducing reliance on fossil fuels.

In 2018, the Kingdom announced its plans to build two large nuclear power reactors as part of a program delivering as many as 16 nuclear power plants over the next 20 to 25 years at a cost of more than $80 billion.

In November this year, Crown Prince Mohammed bin Salman launched the Kingdom's first nuclear research reactor and a center for the development of aircraft structures. These are among seven "strategic" projects launched by the Crown Prince during his visit to the King Abdulaziz City for Science and Technology (KACST) in Riyadh.

2) King Salman Energy Park (SPARK)

A 50 square kilometer energy city megaproject, King Salman Energy Park (SPARK) is located in the Kingdom’s Eastern Province between Dammam and Al-Hasa. The first phase of SPARK, with an investment of approximately $1.6 billion, will be completed by 2021.

SPARK will unite approximately 300 industrial and service facilities, where two-thirds of the development consists of industrial land. The remaining part is a mixed-use community with housing, offices, training centers, hotels and other supporting facilities offered as investment opportunities to real estate investors.

SPARK has already attracted interest from major international investors such as Schlumberger, Baker Hughes GE, Halliburton, Oilfields Supply Center, Emerson, National Energy Services, Valco, Huatong, Borets, and Al-Rushaid Group.

Read: Prince Mohammed inaugurates SPARK project

3) Sakaka PV IPP project

In November this year, King Salman attended the groundbreaking ceremony of the 300 megawatts Sakaka PV IPP -- the first renewable energy project under King Salman Renewable Energy Initiative.

According to the developer ACWA Power, the SAR 1.2 billion plant will supply 45,000 households with power in Al Jouf, with offsetting over 43,000 tonnes of carbon dioxide per year.

The plant is expected to be complete next year and will advance the capabilities of renewable energy sector in Saudi Arabia.

4) Saudi 2019 budget

Saudi Arabia’s 2019 budget allocated SAR 33 billion for the energy, industry, mining and logistics sectors, oil minister Khalid al-Falih said. That is more than three times the amount allocated in the previous budget, he added.

Read: Here’s what analysts are saying about Saudi Arabia’s 2019 budget

5) OPEC agrees to cut production

Saudi-led producers and allies of the Organization of Petroleum Exporting Countries (OPEC) agreed to reduce output by 1.2 million barrels per day (mbd), effective from January next year.

Following deliberations on the immediate oil market prospects and in view of a growing imbalance between global oil supply and demand in 2019, OPEC decided to go for the production adjust.

Write to Paromita Dey at paromita.d@argaamplus.com