Aramco Invests $25 Billion in Major Gas Expansion Projects
1 July 2024: Saudi Aramco, the world’s largest oil exporter, has announced over $25 billion in contracts to significantly advance its strategic gas expansion plan. The initiative aims to boost sales gas production by more than 60% by 2030, compared to 2021 levels.
These contracts pertain to the second phase of the Jafurah unconventional gas field development, the third phase of the Master Gas System expansion, the addition of new gas rigs, and continuous capacity maintenance, the company revealed on Sunday.
“These contract awards demonstrate our firm belief in the future of gas as a vital energy source and feedstock for downstream industries,” said Amin Nasser, Aramco’s president and CEO. “The scale of our continuing 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.”
Aramco has awarded 16 contracts, totaling approximately $12.4 billion, for the second phase of the Jafurah development. The work includes constructing gas compression facilities, pipelines, and expanding the Jafurah Gas Plant with additional gas processing trains, utilities, sulfur, and export facilities. Additionally, the project involves building the new Riyas Natural Gas Liquids (NGL) fractionation facilities in Jubail.
Moreover, 15 turnkey contracts worth around $8.8 billion have been awarded to initiate the third phase expansion of the Master Gas System, aimed at increasing the network’s capacity by 3.15 billion standard cubic feet per day by 2028. This phase will involve installing approximately 4,000km of pipelines and 17 new gas compression trains.
Aramco also announced $2.4 billion in gas rig contracts and $612 million in directional drilling contracts. Additionally, $1.63 billion in contracts for 13 well tie-ins at Jafurah 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 75 billion stock tank barrels of condensate. Phase one of the Jafurah development began in November 2021, with initial start-up expected in the third quarter of 2025. Aramco anticipates total investment in the Jafurah project to exceed $100 billion over its lifecycle, with production expected to reach a sustainable sales gas rate of two billion standard cubic feet per day by 2030.
Aramco’s Master Gas System is a vast network of pipelines linking 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 cleaner alternative to oil for power generation with lower greenhouse gas emissions.
The energy industry is rapidly shifting towards cleaner forms of energy and environmentally friendly solutions as the world transitions to a lower-carbon future. Saudi Aramco joined this effort in 2021, pledging to achieve net-zero carbon emissions by 2050, following Saudi Arabia’s goal to neutralize emissions by 2060.
Oil and gas will continue to be part of the energy mix for decades to come, necessitating ongoing investment, Mr. Nasser emphasized.
