Aramco awards US$10bn worth of contracts for Jafurah unconventional gas development

HRH Minister of Energy Commercialization of Unconventional Resources Ceremony low res Nov 29 2021.jpeg finalAramco has announced the start of development of the vast Jafurah unconventional gas field, the largest non-associated gas field in the Kingdom of Saudi Arabia

The company has awarded 16 subsurface and engineering, procurement and construction (EPC) contracts worth US$10bn for the Jafurah Gas Plant and gas compression facilities, as well as infrastructure and related surface facilities, with capital expenditure at Jafurah expected to reach US$68bn over the first 10 years of development.

This will allow for the reliable delivery of gas and condensates through a dedicated surface network that includes a gas processing plant, a gas compression system and network of around 1,500 km of main transfer pipelines, flow lines and gas gathering pipelines. The programme also includes construction of the Jafurah Bulk Supply Point, transmission lines, power interconnection for Jafurah Gas Plant and new cogeneration plant facilities.

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 cubic feet of gas in place, the Jafurah basin hosts the largest liquid-rich shale gas play in the Middle East. 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.

HRH Prince Abdulaziz bin Salman Al Saud, minister of energy for the kingdom of Saudi Arabia, said, “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.”

Amin H Nasser, Aramco president and CEO, said, “This is a pivotal moment in the commercialisation 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. 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.”

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 programme 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.

In line with Aramco’s Digital Transformation Programme, development of Jafurah will incorporate advanced Fourth Industrial Revolution (4IR) technologies, including Industrial Internet of Things (IIoT) and video analytics, to enhance construction, operation and safety.

Aramco has awarded the majority of Jafurah subsurface contracts, in addition to engineering, material procurement and construction contracts, to contractors based in Saudi Arabia, in association with reputed international contractors and service providers. This is in line with the Company’s efforts to support development of the domestic energy sector and local supply chain partners. 

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