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Transport and Export Infrastructure

Transport and Export Infrastructure

The majority of the oil production discussed in the previous subsection is transported to the oil-processing complex at Abqaiq and then, for NGL, onto the export terminals at Ras al-Juayma, Ras Tanura and Yanbu (see Map 4 for location of terminals) or to refineries. Abqaiq is the world’s largest oil-processing facility and crude stabilization plant, with a crude capacity of 7mbpd. It is operated by Saudi Aramco and processes approximately 70% of Saudi crude oil. The facility’s infrastructure includes pumping stations, gas-oil separation plants (GOSPs), hydro-desulphurization units and an extensive network of pipelines that connects the plants to the aforementioned terminals. Abqaiq was the target of an attempted terrorist attack by al-Qaeda on 24 February 2006 . The news of the attack pushed oil prices up by $2 and led to increased security for oil and gas installations.

At any given time there are between 25,000 and 30,000 military personnel protecting the Kingdom’s infrastructure. Then-US ambassador James C. Oberwetter stated: “The Saudi government and Saudi Aramco deserve considerable credit for what they have done in recent years to enhance the security of oil facilities throughout the Kingdom…. I know firsthand the robust security systems that are in place there. When they were needed, those systems worked, and the facility at Abqaiq was fully protected.” Nevertheless, threats to Saudi oil and gas facilities continue to worry the global energy market and the Saudi leadership, especially with threats now stemming from Islamic State (IS) in Iraq, with which the Saudis share an 814km border.

Map 3 is a schematic overview of the infrastructure linking Khurais, Ghawar and the northern offshore fields with the Abqaiq processing facility.

Map 3. Ghawar, Abqaiq, Ras Tanura and other key infrastructure.
Map 3. Ghawar, Abqaiq, Ras Tanura and other key infrastructure. Click to enlarge.

Export

From Abqaiq or other crude-processing facilities, the oil moves to export terminals at Ras Tanura (6mbpd export capacity), Ras al-Juayma (3mbpd export capacity) or some smaller terminal. Most export oil moves through the Strait of Hormuz, which separates Oman and Iran (see Map 2). This chokepoint is vitally important to world markets, given that 17 million barrels of oil flowed through the strait in 2013. More than 85% of the crude oil that moves through this strait is destined for Asian markets. Of Saudi crude, 68% is destined for Asia, 10% for Europe, 19% for the Americas and 3% for elsewhere. By country, however, the United States is still the top importer of Saudi liquids , estimated at 1.5mbpd. In 2013, the next four top importers of Saudi crude and petroleum products, after the United States, were Japan (1.2mbpd), China (1.1mbpd), South Korea (0.9mbpd) and India (0.8mbpd) (according to Global Trade Information Services).

Much of the pipeline capacity that is outside the Eastern Region has the dual purpose of serving the Kingdom’s markets in the Western Hemisphere and acting as a back-up export route, which would route Eastern Region oil production west to the export terminal at Yanbu on the Red Sea, should a security problem ever close the Strait of Hormuz.

Map 4. East-West pipeline and other major oil and gas infrastructure. Source: EIA
Map 4. East-West pipeline and other major oil and gas infrastructure. Source: EIA. Click to enlarge.

Saudi Arabia has the 1200km Petroline, also known as the East-West pipeline, which runs across Saudi Arabia, from the Abqaiq complex to the Red Sea. The Petroline system consists of two pipelines, with a total nameplate (installed) capacity of about 4.8mbpd. Saudi Arabia also operates the Abqaiq-Yanbu NGL pipeline, which has a capacity of 290,000bpd and serves petrochemical plants in Yanbu. A 380km multi-products line between Dhahran, in the Eastern Province, and Riyadh, and a smaller 354km multi-products line between Riyadh and Qassim (to the north) were also built in the 1980s.

Saudi Arabia’s only functioning international crude pipeline system is a 60-year-old complex of four small underwater pipelines carrying Arabian light crude from Saudi Arabia’s Abu Safa field to Bahrain. This aging pipeline system is expected to be decommissioned after the construction of a new pipeline with a capacity of 350,000bpd running between Abqaiq and Bahrain’s refinery at Sitra. The new pipeline is expected to be completed in the third quarter of 2016.

The hydrocarbons processed in the gas-oil separation facilities (GOSPs) supply much of the crude oil as well as natural gas used in Saudi Arabia’s petrochemical industry. In addition to Abqaiq, processing facilities include the Khursaniya gas plant, which can process 28MCM of associated gas (gas produced from oilfields) per day and produce 15.9MCM per day of sales gas (methane ready for market) and 280,000bpd of NGLs. Other important assets include gas-processing units at the Juayma and Yanbu gas plants. Saudi Arabia does not export natural gas but uses it domestically for electricity generation, as petrochemical feedstock and to power oil and gas operations and desalinization plants. Domestic gas transport is controlled by the Master Gas System (MGS).

Before the MGS (established in 1975), all of Saudi Arabia’s natural gas output was flared (burned off as waste). The MGS feeds gas to the industrial cities, including Yanbu on the Red Sea and Jubail. To supply natural gas to the expanded gas-processing facilities, several additions to the MGS are in the planning phase or under construction. The largest pipeline to be built is the 212km line to the Rabigh complex and to the Yanbu NGL processing facility. Four other pipelines will connect Manifa to the Khursaniya gas plant and to Ras al-Zour for gas processing and power production.