Saudi Aramco has confirmed a phased development for its Jafurah onshore gas production project—which is expected to produce up to 3.1 billion cu ft per day of natural gas liquids and condensates by the next decade—with an estimated $100 billion overall investment.
Amin Nasser, CEO of the Saudi Arabian state-owned energy giant, while reporting its second quarter results on Aug. 14, said construction of production facilities is in two phases—the first to complete in 2025 and the second two years later.
One of the largest shale gas fields outside the U.S., it holds an estimated reserve of 200 trillion cu ft of gas.
“We are increasing our gas production by more than 50% over the next eight years, and that will eliminate almost 1 million barrels of oil burning in the kingdom,” said Nasser, a petroleum engineer who has led the oil firm since 2015. “While global market volatility and economic uncertainty remain, events during the first half of this year support our view that ongoing investment in our industry is essential—both to help ensure markets remain well supplied and to facilitate an orderly energy transition.”
Last month, Worley announced it had been awarded a three-year Saudi Aramco project management contract for Jafurah, with an option for a two year extension. No contract value was noted, but the firm will provide front-end engineering design, detailed design support, project management and construction management services.
Saudi Aramco had also announced last November the award of “16 subsurface and engineering, procurement and construction contracts valued at $10 billion for the Jafurah gas plant and gas compression facilities, as well as infrastructure and related surface facilities,” but did not identify the contract winners or scope of work.
Itay-based Saipem said it will build a system to transport water associated with separation of treated gas in a $750-million contract. that includes engineering, supply of materials, construction and commissioning of about 835 km of pipeline to transport gas, condensate and production water.
“The award of this new project from Aramco consolidates a long-standing relationship and Saipem's strategic positioning in the Middle East,” said Francesco Caio, Saipem CEO.
India-based contractor Larsen & Toubro was also believed to have won a package that includes at least three gas compression facilities that would produce up to 600 million cu ft per day of gas and 150,000 barrels per day of condensate and natural gas liquids, and one that includes export pipelines, said Upstream. Also said to have contract awards are South Korea-based Samsung Engineering and Hyundai Engineering and Hyundai E&C.
Saudi Aramco also is set to award contracts for construction of the Jafurah bulk supply port, transmission lines, gas plant power interconnection and new cogeneration plant facilities.
Jafurah also would provide feedstock for petrochemicals production, as well as hydrogen and ammonia manufacturing, Saudi Aramco said. Saudi Arabia's energy ministry noted earlier that the country plans to use Jafurah gas reserves to produce hydrogen, too.
Saudi Aramco said its latest sustainability report includes a target to reach 12GW of solar and wind capacity by 2035, and produce 11 million tons of blue ammonia by 2030 for use in hard-to-decarbonize sectors such as heavy-duty transport, heating, and industrial. That would require 1.93 million tons of blue hydrogen produced from fossil fuels with added carbon capture and storage.
“Our ambition is to achieve operational net-zero by 2050 and our sustainability report highlights how we aim to continue meeting the world’s rising demand for secure, reliable and affordable energy, while also contributing to the broader energy transition,” Nasser said in the report.
Meanwhile Saudi Aramco reported record profit in the half year through June 30, driven by higher crude oil prices and volumes sold, and better refining margins. Quarter and half-year net income rose to $48.4 billion and $87.9 billion, respectively, from $25.5 billion and $47.2 billion for those periods in 2021.