Extension for Saudi gas hunt

Saudi_Gas_Hunt

Saudi Arabia has granted additional time to one of the consortia hunting for gas in the vast desert in the country's southeast, an industry source said recently.

In a rare opening for international firms, state-run Saudi Aramco set up four consortia in 2003-2004 to drill in the southeast, but so far they have failed to find the volumes of gas needed to fuel Saudi economic growth. EniRepsa Gas Limited, which groups Eni, Repsol-YPF and Saudi Aramco, has been given an extension to April 2012 on the first phase of exploration, an industry source said. The exploration period had been expected to end this year.

Eni declined to comment, while others could not immediately be reached for official comment. A five-year programme includes the acquisition of 5,000 kms of seismic data and the drilling of four exploration wells to explore and produce non-associated gas in block C, a 52,000-sq-km area of the Robh Al Khali (Empty Quarter) basin. The group has completed drilling work at three wells, but drilling the last exploration well was delayed to the second half of next year.

"The last well was delayed to reprocess seismic data," the source said. Eni holds a 50 per cent stake in the consortium, Repsol owns 30 per cent while Aramco has the rest. Other joint ventures include Royal Dutch Shell, China's Sinopec and Russia's Lukoil. None of the companies has made big gas finds, but Lukoil-Aramco joint venture Luksar has made two gas discoveries. The Shell-Aramco joint venture, the South Robh Al Khali Company (Srak), has also made discoveries.

Srak said last year that gas from two zones under exploration in the region flowed at a combined rate of 90 million cubic feet per day (cfd). Terms agreed with Aramco are so poor, analysts say, that the consortia need to find condensates - a form of light oil - which can be sold at international market prices to cover the cost of development. That has meant the firms have been seeking gas rich in condensate, rather than just gas, and that is much harder to find.

Meanwhile, Kuwait has awarded a contract to build a new oil and gas gathering centre to Saudi Khareef Group for US$310mn, the chairman of Kuwait Oil Company (KOC) Sami al-Rasheed said recently.

The new centre, to be built in western Kuwait, will have a daily capacity to process 100,000 barrels of crude and 115 million cubic feet of gas, said Rasheed, according to the official KUNA news agency. Gathering centres perform the physical separation of crude, natural gas, water and other impurities before pumping clean oil for either export or to refineries and gas to power stations.

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