Saudi Aramco to tap into Jafurah deposits in hopes of becoming "major player" in gas

By Anthony DiPaola and Verity Ratcliffe on 4/29/2019

DUBAI (Bloomberg) -- The world’s biggest oil exporter is ramping up efforts to develop natural gas with plans for a 15-fold boost in output from unconventional deposits of the fuel.

Saudi Aramco is building facilities to tap shale gas in the kingdom’s oil-rich eastern region and is making “a lot of progress” toward this goal, CEO Amin Nasser told reporters in Dammam, Saudi Arabia. Plans include a plant to desalinate seawater that Aramco can then inject underground to frac for gas.

“We are looking to take our unconventional gas within the next 10 years to 3 Bscfd of sales gas,” Nasser said on Sunday. Aramco currently produces more than 190 MMcf of unconventional gas daily, all of it in the remote north.

Known officially as Saudi Arabian Oil Co., the state-run company is expanding its search for gas as a potential export to help reduce the nation’s reliance on sales of crude. Saudi Arabia also wants to use gas at home as fuel in power stations and as feedstock for the production of petrochemicals, a high-priority industry for the government in its strategy to diversify the economy.

Earlier attempts to find and develop Saudi gas, together with international partners including ExxonMobil Corp. and Royal Dutch Shell Plc, met with lackluster results. Now, with improved technology, Aramco is seeking unconventional gas at the South Ghawar and Jafurah deposits in eastern Saudi Arabia, Nasser said.

It plans, for example, to build a reverse-osmosis desalination plant to treat Persian Gulf seawater for injection into the Jafurah basin to dislodge shale gas. Jafurah is located between Ghawar, the world’s largest oil field, and the Gulf, near the hub of the Saudi energy industry.

The water-treatment facility is in the planning and design phase and could be in operation in four to five years, Mohammed Al Qahtani, Aramco’s senior V.P. for upstream, told reporters in Dammam.

Aramco plans to double its total gas production to 23 Bcfd over the coming decade, Nasser has said. He sketched out the kingdom’s ambitions on April 25 at a conference in Riyadh.

“For the first time ever, we will be exporting gas either by pipeline or as LNG” -- or liquefied natural gas, Nasser said. “For gas, we will be a major player.”

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