Thursday 27 January 2022
200 trillion cu ft GAS CAPACITY

Aramco awards $10bn EPC contracts for big Saudi gasfield

RIYADH, November 29, 2021

Global energy giant Aramco today (November 29) announced the start of development of the vast Jafurah unconventional gas field, the largest non-associated gas field in Saudi Arabia. 
The company has awarded subsurface and engineering, procurement and construction (EPC) contracts worth $10 billion, with capital expenditure at Jafurah expected to reach $68 billion over the first 10 years of development.
It is a significant milestone both for the commercialisation of unconventional resources in Saudi Arabia and the expansion of Aramco’s integrated gas portfolio, which will provide additional feedstock to support growth of the company’s high-value chemicals business, complement its focus on low-carbon hydrogen production and help reduce emissions in the domestic power sector by providing a cleaner-burning alternative to liquid fuel. 
With an estimated 200 trillion standard cu ft of gas in place, the Jafurah basin hosts the largest liquid-rich shale gas play in the Middle East. 
This shale play covers an area measuring 17,000 sq km and production of natural gas at Jafurah is expected to ramp up from 200 million standard cubic feet per day (scfd) in 2025 to reach a sustainable gas rate of two billion scfd of sales gas by 2030, with 418 million scfd of ethane and around 630,000 barrels per day of gas liquids and condensates, which are essential feedstock for the growing petrochemical industry. It will make Saudi Arabia one of the world’s largest natural gas producers.
Announcing the big contracts, Minister of Energy Prince Abdulaziz bin Salman Al Saud: "The development of Jafurah will positively contribute to the kingdom’s energy mix and it has been made possible thanks to close co-operation between more than 17 different agencies." 
"The government is committed to the empowerment of national companies such as Aramco and no other energy company in the world is empowered to the same extent by the state, or by the Ministry of Energy which oversees the concession to develop the Kingdom’s hydrocarbon resources," he added.
The project is a key component of the company’s long-term strategy and Aramco expects total overall lifecycle investment at Jafurah to exceed $100 billion. 
Through its unconventional gas programme at the Jafurah, North Arabia and South Ghawar fields, the company expects to create more than 200,000 direct and indirect jobs. 
Aramco President and CEO Amin H. Nasser said: "This is a pivotal moment in the commercialization of Saudi Arabia’s vast unconventional resources programme. It is a breakthrough that few outside the kingdom thought was possible, and which has positive implications for energy security, economic development and climate protection."
According to Nasser, gas has a critical role to play in the energy transition and it will help significantly reduce emissions in the domestic energy sector, while providing a feedstock for low-carbon hydrogen and ammonia. 
"It will also allow Aramco to tap into high-value feedstocks for use in the expanding Downstream petrochemicals industry and our aim is to significantly increase our gas production capacity over the next decade to meet demand growth," he added.
Aramco recently announced its ambition to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly-owned operated assets by 2050. 
Jafurah is expected to contribute to Saudi Arabia’s goal of producing half of its electricity from gas and half from renewables as the Kingdom pursues its own 2060 net-zero target. 
At peak production, Aramco’s unconventional gas program is expected to replace around half a million barrels of crude oil per day that would otherwise have been used for domestic consumption. The Jafurah gas development alone is expected to replace more than 300,000 barrels of crude oil per day at peak production. 


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