Saudi Aramco drops US$25Bn in 'strategic gas expansion'

In an expenditure Aramco said totalled US$25Bn, the state-owned oil giant’s EPC contract-funding round takes in phase two development of the vast Jafurah unconventional gas field, phase three expansion of Aramco’s Master Gas System, new gas rigs and ongoing capacity maintenance.

The moves target what Aramco called a ’strategic gas expansion’ of more than 60% by 2030, compared with 2021 levels, according to chief executive Amin H Nasser. 

Mr Nasser said the contracts represent a step towards diversifying the company portfolio and creating new employment, “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.” 

Contract awards

Aramco has awarded 16 contracts, worth a combined US$12.4Bn, for phase two development at Jafurah. The work will involve construction of gas compression facilities and associated pipelines, expansion of the Jafurah Gas Plant including construction of gas processing trains, utilities, sulphur and export facilities. 

It will also involve construction of the company’s new Riyas Natural Gas Liquids (NGL) fractionation facilities in Jubail – including NGL fractionation trains, utilities, storage and export facilities – to process NGL received from Jafurah.

Another 15 lump sum turnkey contracts, worth a combined US$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. 

The 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. Expansion will increase access to domestic gas supplies for customers in the industrial, utility and other sectors – providing a lower gas emissions alternative to oil for power generation.  

Aramco reports the expansion will add 4,000 km of pipelines, boosting capacity by around 3.2Bn standard cubic feet per day and connecting several additional cities from across the country to the network. 

An additional 23 gas rig contracts worth US$2.4bn have also been awarded, along with two directional drilling contracts worth US$612M. Meanwhile, 13 well tie-in contracts at Jafurah, worth a total of US$1.6Bn, have been awarded between December 2022 and May 2024.

The Jafurah gas field is estimated to contain 229Tn standard cubic feet of raw gas and 75Bn stock tank barrels of condensate. 

Phase one of the development commenced in November 2021 and is progressing on schedule with initial start-up anticipated in Q3 2025. Aramco expects the total overall lifecycle investment at Jafurah to eventually exceed US$100Bn and production to reach a sustainable sales gas rate of 2Bn standard cubic feet per day by 2030, in addition to significant volumes of ethane, NGL and condensate.