Page 4 - MEOG Week 37 2021

MEOG COMMENTARY MEOG

Aramco considers

gas moves

Saudi Aramco is considering changes to its gas business as the company seeks

to improve the availability of crude for export and feedstock for petrochemicals

SAUDI ARABIA STATE-OWNED Saudi Aramco is reported Operations (SAOO) areas reporting directly to
to be considering two major changes to its the SVP of Upstream, Nasir al-Naimi.
approach to gas development as the company Formerly Northern Area Producing (NAP)
WHAT: moves to target a leading role in gas, chemicals and Southern Area Producing (SAP), these
Aramco is reported to and hydrogen markets. organisations are responsible for field develop-
be streamlining its gas Over the past week, sources speaking to ment work to the north and south of the compa-
business as it embarks Bloomberg have said that Aramco is changing ny’s headquarters in Dhahran. Each comprises
on a major project to tap the structure of its gas business while mulling 11 departments, while the current gas unit has
large unconventional gas bringing in outside help to develop its main the same number.
resources. unconventional gas asset. The sources said that NAGO and SAGO
Gas development is a core strategic concern would be headed by Jumaan Al Zahrani and
WHY: in Dhahran, with Saudi consistently burning Wail Al Jaafari respectively, pending board
By improving the 700,000 barrels per day (bpd) or more of crude approval. The latter has been the general man-
availability of gas for during August each year to generate enough ager of the company’s southern gas operations
power generation, electricity to cater to peak demand as air-con- since early 2019.
Aramco could export as ditioning use spikes. Replacing this with gas Last August, president and CEO Amin Nas-
much as 700,000 bpd could provide Aramco with more than $1.5bn in ser said: “Gas is a growth area for us, especially
more oil during summer additional revenues at current prices for August considering increasing gas demand in the king-
months. alone. dom. The Northern area is declining, but there
Gas will also play an important role in max- is pick-up in the Eastern province, the Jafurah
WHAT NEXT: imising the potential synergies garnered through basin and South Ghawar in conventional gas.”
The company is also Aramco’s acquisition of a majority share in As with oil, the remit of SAGO would include
considering bringing in chemicals specialist Saudi Basic Industries Corp. the lion’s share of the kingdom’s 238.8 trillion
international partners (SABIC), increasing economies of scale through cubic feet (6.76 trillion cubic metres) of natu-
to assist with the improved feedstock availability. ral gas reserves, 150.2 tcf (4.25 tcm) of which is
development of the non-associated.
Jafurah unconventional Internal structure SAGO will cover the Hawiyah and Haradh
gas basin. Speaking to Bloomberg, sources said that Ara- gas reservoirs around the supergiant Ghawar
mco would separate its gas business line into the oilfield, Shaybah in the east as well as the Jafurah
Northern Area Gas Operations (NAGO) and basin, which holds an estimated gas resource of
Southern Area Gas Operations (SAGO) admin- 200 tcf (5.7 tcm), around half of which is com-
istrative areas. prised of liquids.
These structures have already been in place According to the 2020 annual report, Aramco
since at least early 2019, though, and Middle has a total conventional and unconventional
East Oil & Gas (MEOG) understands that the raw gas processing capacity of 18.3bn cubic feet
new approach is to structure gas in the same way (518mn cubic metres) per day that primarily
as its oil business unit with the Northern Area feeds into the Master Gas System network, which
Oil Operations (NAOO) and Southern Area Oil has a current capacity of 9.6 bcf (272 mcm) per

P4 www. NEWSBASE .com Week 37 15•September•2021