Oil giant Aramco signed contracts worth over USD 25 bn as it pushes deeper into natural gas. The contracts are for the development of the second phase of its Jafurah gas field and the expansion of the Kingdom’s primary natural gas pipeline, according to a statement. Aramco aims to see natural gas production in 2030 be 60% higher than it was in 2021.
The breakdown: In total, the Tadawul-listed oil company inked
- 16 contracts worth USD 12.4 bn for phase two of its Jafurah gas field expansion;
- 15 contracts worth USD 8.8 bn for phase three of its Master Gas System (MGS-3);
- 23 gas rig contracts worth USD 2.4 bn. The contracts include two directional drilling contracts worth USD 621 mn.
Who has landed a contract? Aramco hasn’t yet said. But Reuters reports that a consortium led by Hyundai Engineering and Construction will work on the Jafurah gas field expansion and that Chinese state-owned energy giant Sinopec is involved in the MGS-3 expansion. Kuwait’s Combined Group Contracting Company said in filing to Boursa Kuwait that it has been awarded a contract to do civil works at Jafurah.
ARAMCO’S GAS STRATEGY
The contracts awarded yesterday are part of Aramco’s push into natural gas: “By generating an anticipated 2 bn standard cubic feet per day of sales gas by 2030, this bold initiative will strengthen Saudi Arabia’s position as one of the top national gas producers in the world,” Aramco CEO Amin Nasser said at a contracts award ceremony in Dhahran.
It’s about exports — generating more electricity at home with natural gas: “The scale of our ongoing investment at Jafurah and the expansion of our Master Gas System underscores our intention to further integrate and grow our gas business to meet anticipated rising demand. This complements the diversification of our portfolio, creates new employment opportunities, and supports the Kingdom’s transition towards a lower-emission power grid, in which gas and renewables gradually displace liquids-based power generation.” Nasser said, according to the statement.
WHAT’S JAFURAH?
Jafurah is the largest shale gas development outside the United States and the largest unconventional, non-oil-associated gas field in the Kingdom.
How big is it? It is home to an estimated 229 tn cubic feet of gas and 75 bn barrels of condensates, according to statements by Energy Minister Prince Abdelaziz bin Salman in February. Bin Salman was speaking after Aramco added proven additional natural gas reserves of 15 tn standard cubic feet at the field.
What Jafurah’s expansion entails: The project includes the construction of gas compression facilities and associated pipelines, the expansion of the Jafurah Gas Plant with new gas processing units, utilities, sulfur facilities, and export terminals. It will also see Aramco setting up new Riyas Natural Gas Liquids (NGL) fractionation facilities in Jubail, featuring NGL fractionation units, utilities, storage facilities, and export capabilities to process NGL sourced from Jafurah.
MASTER GAS SYSTEM
The Master Gas System is the Kingdom’s primary natural gas pipeline and includes a network linking gas production and processing sites across the Kingdom.
What’s the expansion? It will add 4k km of pipelines and 17 new gas compression trains with the aim of taking the MGS’ capacity up by some 3.2 bn standard cubic feet by 2028. The MGS now has a capacity of 12.5 bn standard cubic feet per day.