ASSESSING ENERGY POLICY INSTRUMENTS IN RESOURCE RICH COUNTRIES: A CASE STUDY FOR LNG IMPORT IN SAUDI ARABIA

摘要

Natural gas has been identified as part of Vision 2030 in Saudi Arabia to play an important role in diversifying the power mix away from oil.Studies have shown that if Saudi Arabia would meet its domestic gas production and renewable energy targets then it would be enough to meet its demand for power until 2030(Matar and Anwer 2017).While developments are underway to ramp up domestic natural gas production,supplementing domestic supply with LNG imports could be an option to consider.Using a global gas model,this paper examines the issues and implications that come with opening up the economy for LNG imports and what specifications and market configuration are required if such a policy was adopted.The paper reaches the following conclusions: i)LNG imports can provide a marginal benefit to Saudi Arabia’s economy but it could also be a strategic fuel,used in a transition period,to support announced targets for domestic energy sources;ii)The electric load profile in Saudi Arabia is highly seasonal with peaks during the summer months for space cooling.This is counter-cyclical to major LNG importers and offers a value proposition for importing LNG during the summer when prices are lower;iii)An LNG import terminal for Saudi Arabia is best situated in the west coast to alleviate the western and southern regions from the high liquid fuel use;iv)Opening up the economy for LNG imports can further develop the gas markets in Saudi Arabia by introducing a gas benchmark price to create a conducive environment or roadmap toward further gas market liberalization.