Saudi Arabia

Saudi Arabia’s Aramco Awards Over $25bn Of Contracts As It Looks To Massive Gas Expansion

Saudi Arabia’s Aramco has awarded $25bn of contracts as it looks to massively expand its gas network.

Aramco President and CEO Amin H. Nasser said the energy giant has awarded contracts worth more than $25bn to advance its strategic gas expansion, which targets sales gas production growth of more than 60 per cent by 2030 compared to 2021 levels.

The contracts pertain to the phase two development of the vast Jafurah unconventional gas field, the phase three expansion of Aramco’s Master Gas System, new gas rigs, and ongoing capacity maintenance.

Aramco gas contracts

Amin H. Nasser 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.

“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.”

Nasser appreciated the continuous support provided by Prince Abdulaziz bin Salman bin Abdulaziz Al Saud, Minister of Energy, which always pushes Aramco forward.

He noted the Minister’s keenness to make the energy industry in the Kingdom a global model in growth, reliability, development, and diversity, and to contribute positively to supplying the country and the world with energy to achieve sustainability and prosperity.

The company has awarded 16 contracts, worth a combined total of around $12.4 billion, for phase two development at Jafurah.

The work will involve constructing gas compression facilities and associated pipelines, expanding the Jafurah Gas Plant, including the construction of gas processing trains, utilities, sulphur, and export facilities.

It will also involve constructing 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.

Another 15 lump-sum turnkey contracts, worth a combined total of around $8.8bn, have been awarded to commence the phase three expansion of the Master Gas System, which delivers natural gas to customers across the Kingdom of Saudi Arabia.

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

An additional 23 gas rig contracts worth $2.4bn have also been awarded, along with two directional drilling contracts worth $612m.

Meanwhile, 13 well tie-in contracts at Jafurah, worth a total of $1.63bn, have been awarded between December 2022 and May 2024.

The Jafurah unconventional gas field is estimated to contain 229 trillion standard cubic feet of raw gas and 75bn stock tank barrels of condensate. Phase one of the Jafurah development program, 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 $100bn and production to reach a sustainable sales gas rate of two billion standard cubic feet per day by 2030, in addition to significant volumes of ethane, NGL, and condensate.

Aramco’s Master Gas System is an extensive network of pipelines that connects Aramco’s key gas production and processing sites throughout the Kingdom of Saudi Arabia. Its expansion will increase access to domestic gas supplies for customers in the industrial, utility, and other sectors, providing a lower greenhouse gas emission alternative to oil for power generation.

Since 1982, the network has transported associated gas, also known as “waste gas” released during oil production, instead of being flared, illustrating Aramco’s innovation and early adoption of solutions that help mitigate emissions.

This pioneering network, which now transports associated gas and sales gas, has helped Aramco achieve near-zero routine gas flaring and maintain a flare volume of less than 1 per cent of total raw gas production since 2012, contributing to the company having one of the lowest upstream carbon intensities in the industry.

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Arabian Business

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