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‘Energy demand in the Kingdom is expected to keep increasing’

Electricity consumption in the Kingdom has been growing since 2010 in terms of total consumption and consumption per capita, a 2022 study by Umm Al-Qura University showed. (SPA)
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Updated 07 April 2024
Reina Takla
Miguel Hadchity
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‘Energy demand in the Kingdom is expected to keep increasing’

  • We are committed to supporting our partners in KSA, says Adel Al-Juraid, CEO of Mitsubishi Power in Saudi Arabia
Updated 07 April 2024
Reina Takla Miguel Hadchity

RIYADH: Japan’s Mitsubishi Power is committed to supporting Saudi Arabia’s growing demand for energy to help it achieve the prosperity outlined in Vision 2030, according to a top official.

Adel Al-Juraid, CEO of Mitsubishi Power in Saudi Arabia, shared profound insights into the company’s transformative journey in an interview with Arab News, offering a comprehensive overview of their vision, initiatives, and contributions to the Kingdom’s energy sector.

Saudi Arabia is facing a growing electricity demand due to a growing population and increased economic activity. 

Electricity consumption in the Kingdom has been growing since 2010 in terms of total consumption and consumption per capita, a 2022 study by Umm Al-Qura University showed.

Between 2010 and 2017, per capita electricity consumption in Saudi Arabia increased by 20 percent, compared to the US in which it decreased by over 5.9 percent.

“Based on the current energy policy and rapid growth in population and economy, the peak demand in Saudi Arabia is expected to keep increasing and reach approximately 84 GW by 2030 and 103 GW by 2040,” the study predicted.

This increase is very much in the mind of Al-Juraid, and the CEO said: “We are committed to supporting our partners in the Kingdom to meet the country’s growing demand for power.”

He added: “This includes delivering our state-of-the-art low carbon power technology solutions and services to the Kingdom.”

Reflecting on the firm’s history of collaboration with Saudi Arabia, the CEO remarked: “We are proud of our long-standing heritage in the Kingdom.”

Al-Juraid went on to elaborate on the company’s extensive involvement in major projects across the Kingdom, saying: “We have worked on major projects in the Kingdom, including Rabigh, Qurayyah, and the 2.650 gigawatt Jeddah South Thermal Power Plant which features Mitsubishi Power advanced gas turbines and steam turbines.” 

The company has delivered Mitsubishi Power gas turbines of the M501F series to Saudi oil giant Aramco to support them in providing reliable and efficient power generation for their operations and to communities and industries across the Kingdom, the CEO revealed.

He added: “Our industry-leading turbines lead the world in reliability and utilize state-of-the-art technologies to optimize energy efficiency and reduce emissions, contributing to the Kingdom’s goal to provide uninterrupted power to communities around the nation.”

The company has established a service and repair center in Dammam for Hot Gas Path Parts components, as well as a rotor maintenance center, as part of its localization activities and to ensure closeness to customers.

“Our Saudi Arabia assembly facility is another testament to our ongoing expansion efforts in the Kingdom,” Al-Juraid continued.

Built on a facility measuring 17,200 sq. m., the Mitsubishi Power Saudi Arabia gas turbine blade and vane maintenance hub provide HGPP and rotor maintenance support for customers in the Gulf Cooperation Council region, as well as generating employment in Saudi Arabia, according to the CEO.

Al-Juraid set out his ambition to strengthen partnerships with private sector firms and government entities in Saudi Arabia, describing the approach as “multifaceted” and aligned with the Kingdom’s Vision 2030 objectives.

He explained that Mitsubishi Power works with “key energy stakeholders,” including the Ministry of Energy, Saudi Aramco, and SABIC, as well as Saudi Electricity Company , Saline Water Conversion Corporation, and all major projects led by PIF and independent power producers.

“In recent years, Saudi Arabia’s energy landscape has evolved rapidly,” Al-Juraid said.

The CEO added: “With our advanced, reliable and highly efficient power technology solutions and our growing localization initiatives, we aim to continue to partner with both the private and public sector organizations to support them in meeting their power needs and energy transition goals.”

Recognizing the crucial role of government entities in driving large-scale infrastructure projects, Al-Juraid said: “We are proud to engage with government entities in Saudi Arabia to align our initiatives with their strategic priorities. As a trusted long-term partner to the Kingdom, our commitment is demonstrated through ongoing support and services.”

He also highlighted the firm’s role in supporting Saudi Arabia’s Vision 2030, particularly in terms of local talent development and industrial capacity building.

“Mitsubishi Power launched a National Program in 2019 to prioritize the development of local talent and expand industrial facilities and capabilities in Dammam to serve Saudi Arabia and the wider region, in line with iktva ( Aramco’s In Kingdom Total Value Add program) and Saudi Vision 2030,” he explained.

Through iktva, Aramco is taking action to drive additional domestic value creation to support a rapidly changing economic environment and foster future prosperity.

Working with its suppliers, the oil giant captures value that produces long-term tangible benefits – quality jobs for a growing Saudi population, innovation, and diversification of industry, and increased global competitiveness.

Mitsubishi Power has deployed and continues to deploy training and development programs in Saudi Arabia and in Japan to equip Saudi youth with the latest knowledge and know-how when it comes to power generation.

“Today we have over 115 employees and achieved a 54 percent Saudization rate, but my goal is to keep increasing this percentage to provide more and more of our Saudi talent with the opportunity to grow their career with one of the best engineering and technology companies worldwide,” Al-Juraid added.

Furthermore, the CEO discussed Mitsubishi Power’s plans to leverage existing facilities in Dammam to support the growing demand for power generation solutions in Saudi Arabia.

“We aim to provide the best-in-class power solutions to address the Kingdom’s demand for energy, supporting Saudi’s circular carbon economy and cleaner power strategies,” he emphasized.

Al-Juraid addressed the firm’s commitment to contributing to the Kingdom’s economic diversification goals.

To bolster local workforce capabilities, the energy solutions company is providing training programs to equip local citizens with capabilities to develop skills to support the kingdom’s ambitious economic growth targets, according to the CEO.

Topics: Vision2030 Mitsubishi Power Saudi Arabia energy

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Oil Updates – crude heads for weekly gains on anxiety over intensifying Ukraine war

Updated 22 November 2024
Reuters
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Oil Updates – crude heads for weekly gains on anxiety over intensifying Ukraine war

Updated 22 November 2024
Reuters

LONDON: Oil prices extended gains on Friday, heading for a weekly uptick of more than 4 percent, as the Ukraine war intensified with Russian President Vladimir Putin warning of a global conflict.

Brent crude futures gained 10 cents, or 0.1 percent, to $74.33 a barrel by 7:48 a.m. Saudi time. US West Texas Intermediate crude futures rose 13 cents, or 0.2 percent, to $70.23 per barrel.

Both contracts jumped 2 percent on Thursday and are set to cap gains of more than 4 percent this week, the strongest weekly performance since late September, as Moscow stepped up its offensive against Ukraine after the US and Britain allowed Kyiv to strike Russia with their weapons.

Putin said on Thursday it had fired a ballistic missile at Ukraine and warned of a global conflict, raising the risk of oil supply disruption from one of the world’s largest producers.

Russia this month said it produced about 9 million barrels of oil a day, even with output declines following import bans tied to its invasion of Ukraine and supply curbs by producer group OPEC+.

Ukraine has used drones to target Russian oil infrastructure, including in June, when it used long-range attack drones to strike four Russian refineries.

Swelling US crude and gasoline stocks and forecasts of surplus supply next year limited price gains.

“Our base case is that Brent stays in a $70-85 range, with high spare capacity limiting price upside, and the price elasticity of OPEC and shale supply limiting price downside,” Goldman Sachs analysts led by Daan Struyven said in a note.

“However, the risks of breaking out are growing,” they said, adding that Brent could rise to about $85 a barrel in the first half of 2025 if Iran supply drops by 1 million barrels per day on tighter sanctions enforcement under US President-elect Donald Trump’s administration.

Some analysts forecast another jump in US oil inventories in next week’s data.

“We will be expecting a rebound in production as well as US refinery activity next week that will carry negative implications for both crude and key products,” said Jim Ritterbusch of Ritterbusch and Associates in Florida.

The world’s top crude importer, China, meanwhile on Thursday announced policy measures to boost trade, including support for energy product imports, amid worries over Trump’s threats to impose tariffs.

Topics: oil updates oil prices

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Saudi Arabia’s GACA ushers in new era of passenger experience with AI

Updated 21 November 2024
MOHAMMED AL-KINANI
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Saudi Arabia’s GACA ushers in new era of passenger experience with AI

Updated 21 November 2024
MOHAMMED AL-KINANI

JEDDAH: Saudi Arabia’s aviation authority is revolutionizing the passenger experience by incorporating artificial intelligence into its services, in alignment with the nation’s strategic aviation plan, a senior Saudi official said.

At the 2024 Global Civil Aviation Forum in Shanghai, Abdulaziz bin Abdullah Al-Dahmash, vice president of the General Authority of Civil Aviation for Quality and Passenger Experience, highlighted the authority’s ongoing initiatives designed to improve passenger satisfaction.

A session dedicated to GACA’s role in enhancing the passenger experience featured international experts and focused on the authority's efforts to align with Saudi Arabia's aviation strategy and Vision 2030.

The discussion underscored Saudi Arabia's use of data analytics and AI to transform the aviation sector, supporting the National Aviation Strategy and the broader Vision 2030 objectives. This approach is part of the Kingdom's goal to achieve excellence in both aviation services and infrastructure.

The National Aviation Strategy serves as a roadmap to solidify Saudi Arabia’s position as a global leader in tourism, business travel, and logistics. Built around three core pillars — empowering national tourism, improving domestic aviation, and aligning with Vision 2030 — the strategy aims to enhance interconnectivity, increase the market share of national carriers, and expand airport infrastructure.

By leveraging its strategic location and investment potential, Saudi Arabia’s aviation strategy directly contributes to Vision 2030, which aims to strengthen services and bolster the travel and logistics sectors.

Al-Dahmash noted that to achieve the National Aviation Strategy’s ambitious goals, which include tripling passenger traffic to 330 million annually by 2030, Saudi Arabia is prioritizing major infrastructure projects.

This includes constructing new airports, such as the King Salman International Airport, and expanding existing ones to accommodate the surge in passenger numbers. Alongside this, there is a strong focus on improving operational efficiency and enhancing the overall passenger experience.

In this context, GACA is actively developing and implementing programs to meet evolving passenger expectations. One such innovation is the introduction of AI-powered systems that manage and monitor passenger flow, tracking wait times across Saudi airports.

Additionally, the “Bagless Traveler” initiative is transforming the travel process by enabling passengers to complete check-in and baggage handling from their accommodation. During its pilot phase, the service successfully assisted over one million passengers, with more than 2 million bags processed without incident.

Al-Dahmash also emphasized the importance of regulatory frameworks that GACA has implemented, noting that these efforts have significantly improved services at Saudi airports, leading to higher levels of passenger satisfaction. This success has garnered recognition, with several airports receiving local and international awards.

Moreover, GACA has presented its innovative passenger experience programs at global conferences, sharing its best practices with civil aviation authorities worldwide, demonstrating how others can leverage these advancements for similar success.

Topics: GACA aviation

Closing Bell: Saudi main index slips to close at 11,840

Updated 21 November 2024
REEM WALID 
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Closing Bell: Saudi main index slips to close at 11,840

  • Parallel market Nomu gained 681.17 points, or 2.28%, to close at 30,540.28
  • MSCI Tadawul Index lost 4.52 points, or 0.30%, to close at 1,486.82
Updated 21 November 2024
REEM WALID 

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Thursday, losing 27.40 points, or 0.23 percent, to close at 11,840.52. 

The total trading turnover of the benchmark index was SR5.39 billion ($1.43 billion), as 98 of the stocks advanced and 131 retreated. 

The Kingdom’s parallel market Nomu gained 681.17 points, or 2.28 percent, to close at 30,540.28. This comes as 63 of the listed stocks advanced, while 23 retreated. 

The MSCI Tadawul Index lost 4.52 points, or 0.30 percent, to close at 1,486.82. 

The best-performing stock of the day was Al-Baha Investment and Development Co., whose share price surged 10 percent to SR0.33. 

Other strong performers included Saudi Reinsurance Co., with a 7.05 percent increase in its share price to SR43.30, and Saudi Chemical Co., which saw its share price rise 5.46 percent to SR10.24. 

Saudi Cable Co. recorded the largest decline, with its share price dropping 4.02 percent to SR97.90. 

CHUBB Arabia Cooperative Insurance Co. also saw its stock fall 3.13 percent to SR49.50. 

Naseej International Trading Co. experienced a 2.64 percent drop in its share price, which fell to SR92.30. 

On the announcements front, Saudi Awwal Bank has disclosed its intention to issue an SR-denominated Additional Tier 1 Sukuk through a private placement in the Kingdom, as part of its SR20 billion Additional Tier 1 Sukuk issuance program. 

According to a Tadawul statement, the bank has appointed HSBC Saudi Arabia as the sole lead manager for the proposed offer. The statement said the purpose of the issuance is to strengthen the bank’s capital base and support the achievement of its long-term strategic objectives. 

The amount and terms of the sukuk will be determined at a later stage, based on market conditions at that time. 

Saudi Awwal Bank closed the session at SR31.40, down 0.63 percent. 

The Saudi Investment Bank has announced the completion of its US dollar-denominated Additional Tier 1 capital sustainable sukuk offering under its Additional Tier 1 capital sukuk program. 

A bourse filing revealed that the offer is valued at $750 million, comprising 3,750 sukuk with a par value of $200,000 each and a return of 6.275 percent. 

The sukuk have a perpetual maturity, callable after five years. Settlement of the sukuk issuance is scheduled for Nov. 27, and the sukuk will be listed on the London Stock Exchange’s International Securities Market. 

Saudi Investment Bank closed the session at SR13.88, down 0.29 percent. 

Topics: Saudi Arabia TASI Closing Bell Saudi Stock Exchange (Tadawul) MSCI Tadawul Index TASI Nomu Tadawul All Share Index (TASI) Tadawul

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Aramco to increase borrowing, focus on dividend growth, CFO says

Updated 21 November 2024
Reem Walid
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Aramco to increase borrowing, focus on dividend growth, CFO says

Updated 21 November 2024
Reem Walid

RIYADH: Saudi Aramco plans to increase borrowing and focus on enhancing its dividend distribution strategy, revealed the company’s chief financial officer. 

In an interview with Bloomberg, Ziad Al-Murshed explained that this move is part of the company’s efforts to optimize its capital structure. 

Aramco is considered one of the pillars of the Saudi economy, encompassing the entire oil production chain, from hydrocarbon extraction to energy generation, as well as refining and commercial distribution activities.  

“You’ll see us do a couple of things. One is, just take on more debt compared to use of equity,” Al-Murshed said during the interview. 

“It’s nothing to do with the dividend, it is optimizing our capital structure so that we end up with a lower weighted average cost of capital,” he added. 

Aramco returned to the debt market earlier this year after a three-year hiatus, raising $9 billion in two separate issuances. In June, it launched a $6 billion offering of dollar-denominated bonds, followed by a $3 billion issuance of Islamic bonds in September.   

The CFO noted: “We had the luxury of sitting out those three years until the market became conducive.” 

Al-Murshed provided insight into how the company increased its dividend by 4 percent in each of the past two years and is now paying over $81 billion in base dividends. 

“We’re looking for it to be progressive over the years,” he said, adding that the company’s free cash flow supports this strategy. 

While the company plans to issue debt regularly, Al-Murshed emphasized that it will not be overly frequent and revealed that Aramco has no plans to sell more debt for the remainder of 2024. 

“We want to be active, but we don’t want to be too active,” he said. 

The CFO further clarified that the company’s decision to sell debt is primarily aimed at broadening its investor base. 

Al-Murshed did not specify whether Aramco would borrow to support its dividend payments, which are set to total $124 billion this year, exceeding the company’s earnings. 

Earlier this month, Aramco reported a net profit of SR103.37 billion ($27.52 billion) for the third quarter of 2024, exceeding analyst expectations, which had projected a median net income of $26.9 billion. 

However, in a statement released at the time, the company noted a 15.4 percent decline in net profit compared to the same period in 2023, attributed to challenging market conditions, including lower prices for crude oil, refined products, and chemicals. 

Aramco’s vision remains to be the world’s leading integrated energy and chemicals company, operating in a safe, sustainable, and reliable manner.   

Topics: Aramco Saudi Aramco

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Saudi Arabia's Ma’aden proceeds with $10bn capital raise to boost phosphate stake

Updated 21 November 2024
MIGUEL HADCHITY 
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Saudi Arabia's Ma’aden proceeds with $10bn capital raise to boost phosphate stake

  • Ma’aden said its shareholders will convene virtually on Dec. 11 to approve the capital increase
  • Plan includes issuing 111 million new ordinary shares valued at SR10 each
Updated 21 November 2024
MIGUEL HADCHITY 

RIYADH: Saudi Arabian Mining Co., or Ma’aden, has issued a shareholder circular outlining the terms of its plan to raise its share capital to SR38.03 billion ($10.1 billion) from SR36.92 billion to boost its phosphate business. 

The move follows an earlier announcement to acquire a 25 percent stake in Ma’aden Wa’ad Al-Shamal Phosphate Co. from Mosaic Phosphates B.V., increasing its ownership in the joint venture to 85 percent. 

In April, Ma’aden announced the signing of an agreement to acquire 210.93 million shares owned by Mosaic Co. and its subsidiary, Mosaic Phosphates B.V. Regulatory approval for the transaction was granted in November by the Capital Market Authority.

In a bourse filing, Ma’aden said its shareholders will convene virtually on Dec. 11 to approve the capital increase. The plan includes issuing 111 million new ordinary shares valued at SR10 each, representing a 3.01 percent rise in the company’s share capital. 

In exchange, Mosaic Phosphates will transfer its MWSPC stake to Ma’aden, aligning with the Saudi firm’s strategic expansion in the phosphate sector. 

MWSPC, established in 2014 and based in Turaif, is a joint venture between Ma’aden, Mosaic Co., and Saudi Basic Industries Corp. Following the transaction, SABIC will retain its 15 percent stake while Ma’aden strengthens its position as a global phosphate leader. 

Mosaic Netherlands Holding Co., a subsidiary of Mosaic Co., will receive the newly issued shares, which will be subject to a three-year lock-up period. Limited transfers will begin in the fourth year, with full tradability by the fifth year, the circular said. 

The acquisition will enhance Ma’aden’s control over MWSPC, recognized as a low-cost, large-scale phosphate producer. It will also grant Ma’aden access to Mosaic’s marketing rights, a component of the deal’s valuation at SR5.62 billion. 

Ma’aden expects increased earnings per share following the transaction, reflecting anticipated synergies and enhanced operational efficiencies, according to the document. 

The company assured shareholders that all regulatory approvals for the transaction have been secured, with a detailed timeline for procedural steps provided in the circular. 

The move underscores Ma’aden’s commitment to driving value creation in the Kingdom’s mining sector, aligning with Saudi Vision 2030 goals to diversify the economy and develop industrial capabilities. 

In the first half of this year, Ma’aden achieved a net profit of SR2 billion, marking a 160 percent increase compared to the same period in 2023. 

The surge in profitability was driven by several key factors. A major contributor to this financial success was the significant boost in sales volume, according to a Tadawul statement. 

The company’s robust performance in primary aluminum and gold sales played a crucial role in driving up revenues. Ma’aden also benefited from reductions in raw material costs and lower depreciation expenses, which further enhanced its profitability. 

Ma’aden’s performance and strategic advancements underscore its commitment to leading the mining sector and contributing to Saudi Arabia’s economic diversification goals, particularly in developing mining as a critical pillar of the Kingdom’s industry. 

Topics: Saudi Arabia Mining Saudi Arabian Mining Co. (Ma’aden) Ma’aden Saudi mining

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