E&P

Jafurah development

Aramco has awarded 16 contracts, worth a combined total of around US$12.4bn, for phase two development at Jafurah, involving construction of gas compression facilities and associated pipelines, expansion of the Jafurah Gas Plant including construction of gas processing trains, and utilities, sulfur and export facilities. It will also involve construction of the Company’s new Riyas Natural Gas Liquids (NGL) fractionation facilities in Jubail — including NGL fractionation trains, and utilities, storage and export facilities — to process NGL received from Jafurah.

The Jafurah unconventional gas field is estimated to contain 229 trillion standard cubic feet of raw gas and 75bn Stock Tank Barrels of condensate. Initial start-up anticipated in the third quarter of 2025, with production expected to reach a sustainable sales gas rate of two billion standard cubic feet per day (bscfd) by 2030, in addition to significant volumes of ethane, NGL and condensate.

Another 15 lump sum turnkey contracts, worth a combined total of around US$8.8bn, have been awarded for the phase three expansion of the Master Gas System, involving the installation of around 4,000km of pipelines and 17 new gas compression trains, which will increase the size of the network and raise its total capacity by an additional 3.15 bscfd by 2028.

An additional 23 gas rig contracts worth US$2.4bn have also been awarded, along with two directional drilling contracts worth US$612mn and 13 well tie-in contracts at Jafurah, worth a total of US$1.63bn.

Amin H. Nasser, Aramco president & CEO, said, “These contract awards demonstrate our firm belief in the future of gas as an important energy source, as well as a vital feedstock for downstream industries. 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.”

AIEN International Energy Summit underlines critical role of gas

The panel addressed the role of gas in the energy transition. (Image source: AIEN International Energy Summit)

A panel session at the AIEN International Energy Summit in Bangkok, Thailand, focused on the role of gas in the energy transition, looking at how natural gas, particularly LNG, impacts the security, affordability and sustainability of a robust energy future

Moderator Edward Taylor, partner, A&O Shearman asked the question, is natural gas still relevant to the energy evolution?

Andrew Kirk, vice president Origination, LNG, B Grimm said it will continue to play a big role. “The issue with renewables capacity and their intermittent nature means we will continue to need natural gas. New technologies such as batteries are still a long way off from being able to supply a full grid load. Renewables are also geographically bespoke and not available to all. They can provide solutions in areas with limited demand but the cost to run a city like Bangkok is so problematic. Many countries will not be able to cope with the cost increase of moving straight to renewables.”

Steve Morrell, senior vice president, ExxonMobil PNG LNG, agreed. “The conversation about gas has never been more pertinent. Whether we are talking about emissions, the war in Ukraine, or living standards around the world – gas has its part to play. There are also so many conversations about the rise of Artificial Intelligence. But where is the power coming from to feed these data centres that will play such a large part?"

Accelerating the energy transition

“Gas can accelerate the energy transition today. We can stop coal today. We can fill the gaps in intermittent renewables today. So, what is holding us back?”

“We are far enough along the energy transition to separate the aspirational and the unachievable,” said Kirk. “We are hearing these ideological positions where gas is considered unnecessary without having a sensible conversation about alternatives. Moving straight to renewables will create very unstable energy grids that will stifle economic growth.”

With the global population set to grow by 2bn by 2050, Morrell believes the responsibility will grow even higher on the energy companies to provide affordable, reliable and sustainable energy, and natural gas will play a large role in this.

“Gas is well understood and relatively cleaner compared with coal. The infrastructure is there and expanding. There is a lot to be said for the marriage between gas and intermittent renewables. Moving from a well-known system to new technology – it isn’t going to happen overnight. We could put more gas into the system. This will help see a 60% reduction in emissions if we replace coal, without even using new technologies.”

“One of the main problems is how to fill the gaps from renewables,” Kirk concluded. “The answer is gas. The stage is set for a reasoned conversation about gas.”