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Saudi Arabia

 
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Saudi Arabia

Hydrocarbon Sector Transport and Storage Facilities

Pipelines usually provided the easiest and most efficient means of transporting oil and gas products. Expansion of the pipeline system was the major prerequisite for increased crude oil production and exports, for use of associated and nonassociated gas, and for increased refining and distribution of products. Saudi Arabia had four major pipelines serving the crucial transport needs of the country's hydrocarbon sector. In the 1980s and early 1990s, pipeline construction and expansion have been motivated by security concerns stemming from the two major wars fought in the gulf rather than for economic reasons. Therefore, development efforts have concentrated on moving crude oil, products, and export terminals to the western part of the country.

Two of the major crude oil pipelines crossing Saudi Arabia have been shut down. The Trans-Arabian Pipeline (Tapline), built in the 1950s to export oil to the Lebanese port of Az Zahrani on the Mediterranean Sea, ceased operations after the onset of the Lebanese civil war in the 1970s. Whereas small quantities of oil continued to be shipped to the Az Zarqa refinery in Jordan, this operation was also terminated in September 1990 as a result of Jordan's stance in the Persian Gulf War and its inability to meet Saudi Arabia's payment terms. The second pipeline that has been closed runs from the southern Iraqi border town of Az Zubayr to Saudi export terminals on the Red Sea. The Iraqis built the pipeline in two sections: the first, IPSA 1, was originally a spur to Petroline, Saudi Arabia's main oil transport artery, which allowed access to Petroline for further transport of Iraqi crude oil on to Yanbu, the second, IPSA built to parallel Petroline, ended at the export terminal at Ras al Muajjis near Yanbu. This pipe, with capacity to transport more than 1.6 million bpd, opened in January 1990, but closed in August 1990 after the UN ordered an embargo on Iraqi exports. Moreover, the pipeline's two pump stations in southern Iraq suffered heavy damage during the Persian Gulf War.

Petroline runs from Abqaiq to Yanbu. Built in 1981 with the capacity to move more than 1.8 million bpd of crude oil, Petroline was expanded to handle 3.2 million bpd in 1987. The expansion consisted of laying a new pipeline parallel to the original. Further development plans call for additional capacity to raise overall throughput to 4.5 million bpd. This project will give Saudi Aramco greater flexibility to move different grades of crude oil to its western export terminals. Security concerns have largely motivated this expansion because the kingdom's foreign customers have shown less enthusiasm for lifting crude oil from the Red Sea port as a result of the higher cost of cargoes. Consequently, the actual carriage from Petroline has averaged only 1.5 million bpd. Saudi Arabia's other major pipeline is the east-west NGL pipeline. This pipe runs from Shadqam to Yanbu, again parallel to Petroline, and can transport 270,000 bpd of NGL. Given the problems associated with the gas-gathering system, original plans to expand the pipeline to 490,000 bpd were shelved. Finally, a smaller pipeline, built in the 1940s, runs from Saudi Aramco's facilities in the Eastern Province to the refinery on Bahrain, transporting approximately 200,000 bpd of crude oil.

The kingdom had three main export terminals for crude oil with a number of smaller facilities closer to production units. The export terminals at Ras Tanura on the Persian Gulf were the largest in the world. Designed to export crude oil and LPG, the facilities included two piers and one sea island with a total of eighteen berths, which can accommodate ships of up to 550,000 deadweight tons (dwt). The facilities also included a tank farm with total storage capacity of 33 million barrels. Also on the Persian Gulf, thirty-three kilometers north of Ras Tanura, is the port of Al Juaymah. Tankers of up to 700,000 dwt could be accommodated at its six single-point moorings. Up to 4 million bpd of crude oil could be exported from Al Juaymah. Two additional berths were designed to export 200,000 cubic meters of LPG. Tank farm storage facilities had a capacity of 17.5 million barrels. The third Persian Gulf export terminal at Az Zuluf, located sixty-four kilometers offshore, served the Az Zuluf and Al Marjan fields with one single-point mooring.

AOC and Getty Oil operated two other Persian Gulf ports in the Divided Zone. AOC had four berths with varying capabilities located almost five and eleven kilometers offshore at Al Khafji. Offshore facilities at Mina Saud, managed by Getty Oil, serviced ships at shallower berths.

In 1981 Saudi Arabia opened the Red Sea port of Yanbu. Consisting of three offshore crude-oil berths, the port could handle tankers up to 550,000 dwt. In the early 1990s, total crude oil loading capacity stood at 2.6 million bpd with storage facilities holding as much as 6 million barrels. LPG export facilities included two berths that served ships with 200,000- cubic-meter capacity. By the end of 1992, expansion plans called for adding a fourth crude-oil berth that would increase the port's overall loading capacity to 3.9 million bpd. Connected to the IPSA 2 pipeline was the Red Sea port of Ras al Muajjis, south of Yanbu. Farther south at Rabigh, Saudi Arabia was completing a small port to serve the refinery. Nine berths capable of handling ships up to 312,000 dwt were under construction in 1992.

Both Saudi Aramco and Samarec maintained a fleet of tankers to export crude oil and products. In 1992 Saudi Arabia controlled forty-three vessels with a combined displacement of 7 million dwt. Vela Marine International, Saudi Aramco's shipping subsidiary, had twenty-eight ships in its fleet, of which it owned six and chartered the rest. Samarec's fleet consisted of fifteen ships, including four small crude-oil tankers and eleven clean-product tankers. Expansion plans in the early 1990s called for Vela Marine International to acquire twenty-one additional vessels at a projected cost of US$2 billion. In addition to the six very large crude carriers (VLCCs), each with a capacity of 280,000 dwt under construction in the early 1990s, Vela planned to add nine VLCCs and eight ultra-large crude carriers (ULCCs), each with a capacity of 350,000 dwt. The expansion of the fleet resulted from Saudi Aramco's desire to move as much as 70 percent of its crude exports on its own tankers, thereby reducing transport costs. Moreover, it sought marketing flexibility and floating storage facilities so as to improve the market balance of supply and demand.

Data as of December 1992

 

Saudi Arabia - TABLE OF CONTENTS

  • The Economy

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