Now I have time to elaborate. Here is what I was referring to.
Under the first of the new contracts announced today, GE will supply 20 Frame 9E gas turbines to Kharafi National of Kuwait for the Sabiya Power Station, which will add more than 2.5 gigawatts of power capacity for the State of Kuwait. The new power plant will be owned and operated by Kuwait’s Ministry of Electricity & Water.
This will be an emergency power, fast-track project with an aggressive delivery schedule. The gas turbines will be manufactured at GE’s facilities in Belfort, France, with shipments to the project site planned for October 2007 through June 2008. The commissioning phase for the new units is expected to begin in May 2008 and be completed in September 2008.
The Sabiya plant will operate in simple-cycle base load mode, initially using liquid fuel with plans to switch to natural gas when it becomes available in approximately three years.
I trust you understand the implications.
Subtract 70 kb/d from exports? I'm taking a wild guess (my rule of thumb for large diesel generators is the best I can do), but can anyone put a sane number to this from personal experience? One which is softer and gentler than -3% in Q4 2008 production extended into 2011 at the earliest?
That's a 25% capacity expansion in just one year, from just one supplier of several selling into the market right now (you can probably up that with another 5-10%). And that's reflected in the setup - jet engines fed from the refineries, blasting hot air into the desert with a thermal efficiency of 35%.
Why the panic?
Let's see what Reuters have been saying.
Reuters wrote:KUWAIT, July 10 (Reuters) - Kuwait on Tuesday stepped up a campaign of text messages to its inhabitants to conserve electricity, warning power generation was nearly at breakpoint.
"Only 4 percent electricity remains!!," Kuwait's Ministry of Water and Electricity told inhabitants in text messages in English and Arabic, advising people not to use some electrical appliances before evening.
Call centres have been calling offices and apartments in the past two weeks and urging them to turn down air conditioners.
"Do you know that you should switch off your A/C in unused rooms. Please do it," a woman told the Reuters office.
Now imagine ConEd or PG&E making the same demands. I'm talking mass texting an order with exclamation marks. Hmm? Not likely, is it?
By the way, in that same release above, seems Qatar wants an aluminium smelter, although it's going for the full NG-fired CCGT setup. In practicality, that's an improvement on Dubai's ambitions, but that's still gas not arriving at a port near you.
Isn't it strange how the markets can celebrate energy technology exports and double-digit growth in the sector, yet in another breath make demands for oil output increases? A double-edged sword not being priced in?
This sort of thing replicated across the ME Gulf is going to wipe out any increase OPEC could credibly pull off.
EDIT: Again, I would like to know, can someone make an educated estimate for the rate at which this specific OCGT gear is going to burn liquids, and maybe a boe/d or something so we have an idea of how this compares to crude volumes? I know the refinery balance in the ME Gulf produces kerosene / jet fuel for export, so I am assuming that gigawatts'-worth of guaranteed new demand showing up in 13 months is not going to be negligible.