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Saudi Aramco boosts gas network with $25bn deals

Saudi energy minister Prince Abdulaziz bin Salman Al Saud speaks at the contract awards ceremony SPA
Saudi energy minister Prince Abdulaziz bin Salman Al Saud speaks at the contract awards ceremony

Saudi Aramco has awarded contracts exceeding $25 billion to expand its strategic gas programme.

The state-owned energy major is aiming to increase production by more than 60 percent by 2030 compared to 2021 levels.

The contracts relate to the phase two development of the Jafurah unconventional gas field, phase three expansion of Aramco’s master gas system (MGS), new gas rigs and ongoing capacity maintenance.

“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,” said Aramco president and CEO Amin Nasser. 

“The scale of our ongoing investment at Jafurah and the expansion of our MGS underscores our intention to further integrate and grow our gas business to meet anticipated rising demand.”

The oil giant awarded 16 contracts worth over $12 billion for phase two development at Jafurah. The work will involve the construction of gas compression facilities and associated pipelines, expanding the gas plant and constructing gas processing trains, utilities, sulphur and export facilities.

In addition, it involves the construction of the new Riyas natural gas liquids (NGL) fractionation facilities in Jubail, including NGL fractionation trains, utilities, storage and export facilities.

Another 15 turnkey contracts worth almost $9 billion have been awarded to commence the phase three expansion of the MGS, which delivers natural gas to customers across the kingdom. 

The expansion, being conducted in collaboration with the energy ministry, will increase the size of the network and raise its total capacity by an additional 3.15 billion standard cubic feet per day (bscfd) by 2028 through the installation of around 4,000km of pipelines and 17 new gas compression trains.

Twenty three gas rig contracts worth $2.4 billion were awarded, along with two directional drilling contracts worth $612 million. Thirteen well tie-in contracts at Jafurah worth $1.63 billion have been awarded between December 2022 and May 2024.

The Jafurah unconventional gas field is estimated to hold 229 trillion standard cubic feet of raw gas and 75 billion stock tank barrels of condensate. Phase one of the Jafurah development programme, which commenced in November 2021, is progressing on schedule with initial start-up anticipated in the third quarter of 2025.

Aramco expects total overall lifecycle investment at Jafurah to exceed $100 billion and production to reach a sustainable sales gas rate of two billion bscfd by 2030, along with significant volumes of ethane, NGL and condensate.

The MGS, which transports associated gas and sales gas, has helped Aramco achieve near-zero routine gas flaring and maintain a flare volume of less than one percent of total raw gas production since 2012.

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