Big push to increase Saudi's Gas Output

17 Oct

Aramco Plans Big Push to Increase Saudi’s Gas Output – Saudi Aramco plans to start production from a long-known gas field on the Red Sea next year as part of the state giant’s strategy to boost domestic gas output by almost 250% in the coming decades. The Midyan gas field, discovered in the 1980s during an oil exploration program but appraised by Aramco in 2010, will come on stream in 2013, company President Khalid al-Falih said on Sunday in comments to the state Saudi Press Agency (SPA). Output will be a modest 75 million cubic feet per day for 20 years and will be used to displace liquids currently used for power generation in the Northwest of the country.

Saudi Arabia could soon become a net importer of oil – Read our Previous Blog Post

Aramco’s announcement of a discovery in the Red Sea last week was the company’s first strike in a planned seven-well exploration program in the shallow and deep waters of the lightly explored Red Sea, al-Falih said.Aramco began exploring shallow waters in 2011 and expected to begin deepwater exploration by the end of 2012. The discovery flowed at 10 MMcf/d, similar to the rate from a strike in 2011 at Jalamid-3, which flowed at 12 MMcf/d. Aramco has said it expected Jalamid to produce roughly the same volume as  Midyan, and also be used to offset liquids burning.
Aramco plans to increase conventional and unconventional gas production by nearly 250% “in the coming couple of decades,” al- Falih said in a speech at the Oxford Energy Seminar last month, but posted online this week. That would put gas production, which averaged 9.88 billion cubic feet per day in 2011, near 33 Bcf/d, according to al-Falih’s plans. Nonassociated gas projects at Karan, Arabiyah and Hasbah — all located in the Mideast Gulf — will add 4.3 Bcf/d of gas by 2014, but Aramco has not detailed its next round of major developments. Al-Falih said there are “indications” that the kingdom’s unconventional gas potential could be as large as its conventional gas base, which stands over 280 trillion cubic feet. “We are currently evaluating this potential,” he added.

Domestic energy consumption in Saudi Arabia is growing rapidly, and government studies by the King Abdullah City for Atomic and Renewables (Ka-Care) predicts power demand will increase from 60 gigawatts to some 120 GW by 2030. Ka-Care has unveiled ambitious solar and nuclear plans to meet a huge amount of this increase, but its proposals remain stalled. Aramco also embraces the use of solar, albeit on much more modest basis, and believes its heavy oil exploration programs can prove up significant additional reserves. “There are vast areas of Saudi Arabia which have still not been adequately assessed, which will be aggressively explored,” al-Falih said. He noted the company also remains devoted to oil, outlining plans to invest some $35 billion in oil exploration and development in the next five years. Aramco is sticking to plans to increase refining capacity to 8 million  barrels per day, from around 4 million b/d currently, despite many majors abandoning the downstream sector. And it wants to build a $80 billion complimentary chemicals business to maximize value of its hydrocarbons and create jobs for Saudis. “In contrast with the prevailing global sentiment, we believe that large integrated companies can build and sustain a turbo-charged and profitable downstream business, yielding returns across the value chain,” al-Falih said.

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Posted by on October 17, 2012 in Gas, Oil, Traditional Energy


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