Saudi to extend cut, Yanbu facility on its way
RIYADH, May 8, 2017 – The agreement to restrict the production of crude oil to control oversupply could continue until the second half of 2018, Saudi Arabia’s minister of energy, industry and mineral resources said at the Asia Oil and Gas Conference in Kuala Lumpur on Monday.
Khalid A. Al Falih stated that he was confident that the oil market would balance itself, despite the USA’s heightened shale output and maintenance shutdowns for refineries of OPEC members. Other members of the agreement, including Russia, have agreed that an extension on output is required.
“We are discussing a number of scenarios and believe an extension for a longer period will help speed up market rebalancing,” Al Falih’s Russian counterpart Alexander Novak said on Monday.
In other news, Saudi Arabia’s Saline Water Conversion Corporation on Sunday said it had inked a contract with China’s Shandong Electric Power Construction Corporation III to complete the third phase of its Yanbu water and power plant.
Located on the Red Sea coast, the USD 1.35-billion (SAR 5.16 billion) planned facility will have a capacity of 2.5 GW and produce 550 million litres of water per day. The desalination process is expected to commence in 2018, with its start-up capacity increasing every three months to full capacity at 22 months.
The plant is currently 60% complete.
GE won the contract for manufacturing the facilities main equipment. Samsung Engineering Corporation, which was part of the consortium meant to build the plant, left the project in January 2017.