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MEOG FinanCe & inVestment MEOG
Saudi plans $110bn investment in Al-Jafurah gas field
saudi arabia
SAUDI Aramco plans to invest $110 billion to develop unconventional gas reserves in the Al-Jafurah field, Saudi Press Agency (SPA) reported on Friday.
The development plans were reviewed by the Saudi High Commission for Hydrocarbons in a meeting chaired by Crown Prince Mohammed bin Salman.
The Al-Jafurah deposits are estimated to hold 200 trillion cubic feet of wet gas and the phased development of the field is expected to gradually increase production to 2.2 trillion cubic feet per year by 2036 if fully completed, SPA said.
Al Jafurah is southeast of Ghawar, the world’s largest conventional oilfield and is located between Ghawar and the Gulf, near the hub of the Saudi energy industry. It will be able to pro- duce about 130,000 barrels per day of ethane, representing about 40 per cent of the kingdom’s current production, and about 500,000 barrels per day of gas liquids and condensates required for the petrochemical industries, representing about 34 per cent of its current production
Unconventional gas refers to reserves requir- ing advanced extraction methods, such as those used in the shale gas industry.
SPA said the crown prince ordered gas pro- duced from Al-Jafurah to be prioritized for domestic industries, including electricity, water desalination, mining and others, to support the Kingdom’s Vision 2030 development plan.
The crown prince also said that within 22 years, from the beginning of its development the field would earn a net income for the gov- ernment of about $8.6 billion annually (SR32
billion) and will provide gross domestic prod- uct with an estimated $20 billion (SR75 billion) annually and lead to creating direct and indi- rect job opportunities for citizens in those sec- tors and others. He noted that the stages of its development will gradually increase the field’s production of gas to reach on development com- pletion to 2.2 trillion cubic feet per year; he also praised Saudi Aramco for developing the field, saying it will help transform Saudi Arabia into one of the world’s leading gas producers.
Known officially as Saudi Arabian Oil Co., the state-run company is expanding its search for gas as a potential export to help reduce the nation’s reliance on sales of crude. Saudi Arabia also wants to use gas at home as fuel in power stations and as feedstock for the production of petrochemicals, a high-priority industry for the government in its strategy to diversify the economy.
Earlier attempts to find and develop Saudi gas, together with international partners includ- ing ExxonMobil Corp. and Royal Dutch Shell Plc, have met with lacklustre results. Using improved technology, Aramco plans centre on finding unconventional gas at the South Ghawar and Jafurah deposits in eastern Saudi Arabia.
It also plans to build a reverse-osmosis desal- ination plant to treat Persian Gulf seawater for injection into the Jafurah basin to dislodge shale gas. The water-treatment facility is in the plan- ning and design phase and is expected to be in operation in four to five years.
Aramco intends to double its total gas pro- duction to 23 Bcfd over the coming decade.™
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w w w. N E W S B A S E . c o m Week 08 26•February•2020