Aramco’s strategic gas expansion progresses with $25bn contract awards

Aramco’s strategic gas expansion progresses with $25bn contract awards

Aramco, a global leader in integrated energy and chemicals, has awarded contracts exceeding $25 billion to advance its strategic gas expansion. This initiative aims to boost sales gas production by more than 60 percent by 2030, compared to 2021 levels.

The contracts pertain to the second phase of development at the expansive Jafurah unconventional gas field, the third phase of expansion for Aramco’s Master Gas System, the deployment of new gas rigs, and ongoing capacity maintenance.

Amin H. Nasser, Aramco president & CEO, commented: “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. To get where we are today, a lot of hard work, innovation and a strong ‘can do’ spirit has been demonstrated by teams across our vast network of suppliers and service providers, who have joined Aramco on this journey to build and expand our world-class energy infrastructure.”

Aramco has awarded 16 contracts worth approximately $12.4 billion for phase two development at Jafurah. This phase involves constructing gas compression facilities, associated pipelines, expanding the Jafurah Gas Plant, and building new Riyas Natural Gas Liquid Fractionation Facilities in Jubail.

Additionally, 15 lump sum turnkey contracts, worth around $8.8 billion, have been awarded for the phase three expansion of the Master Gas System. This collaboration with the Ministry of Energy aims to expand the network and increase its capacity by 3.15 billion standard cubic feet per day by 2028, involving the installation of 4,000km of pipelines and 17 new gas compression trains.

Further, 23 gas rig contracts worth $2.4 billion, two directional drilling contracts worth $612 million, and 13 well tie-in contracts at Jafurah worth $1.63 billion have been awarded between December 2022 and May 2024.

The Jafurah unconventional gas field holds an estimated 229 trillion standard cubic feet of raw gas and 75 billion Stock Tank Barrels of condensate. Phase one of the Jafurah development, initiated in November 2021, is on track, with initial start-up expected in the third quarter of 2025. Aramco anticipates total lifecycle investment at Jafurah to surpass $100 billion, with production reaching two billion standard cubic feet per day by 2030, along with significant ethane, NGL, and condensate volumes.

Aramco’s Master Gas System, a comprehensive pipeline network, connects key gas production and processing sites across Saudi Arabia. Its expansion will enhance access to domestic gas supplies for industrial, utility, and other sectors, offering a lower-emission alternative to oil for power generation. Since 1982, the network has transported associated gas, reducing flaring and contributing to Aramco’s achievement of near-zero routine gas flaring and maintaining a flare volume of less than 1 percent of total raw gas production since 2012. This has helped Aramco maintain one of the lowest upstream carbon intensities in the industry.

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2 July 2024