MOSCOW (MRC) -- Saudi Aramco has received regulatory approval for the development of the Jafurah shale gas field in Saudi Arabia's Eastern Province, reported S&P Global.
The announcement was made on Friday at a meeting chaired by Crown Prince Mohammad bin Salman (MBS). Aramco will invest 412 billion Saudi riyals (USD110 billion) to develop the field, the largest unconventional nonassociated gas field in the country, with a length of 170 kilometers (km) and a width of 100 km. The volume of gas resources in the field is estimated at 200 trillion cubic feet of wet gas, which contains gas liquids that can be used in the petrochemical industry.
Staged development will gradually increase the field's production to reach approximately 2.2 billion standard cubic feet/day of gas by 2036, representing 25% of the country's current production, MBS pointed out. Production will begin in 2024, Aramco says. Because of the field's characteristics, it will be able to produce about 130,000 b/d of ethane, accounting for about 40% of current production. The company also expects the field to produce approximately 550,000 b/d of gas liquids and condensates required by the petrochemical industry, representing about 34% of current production. Petrochemical development in Saudi Arabia has been held back in recent years by a shortage of ethane, which has led producers to focus their attention on mixed-feed steam crackers and crude oil-to-chemicals projects. The Jafurah project could help rebalance this trend.
The news heralds a major expansion of hydraulic fracturing in Saudi Arabia. Aramco already uses the technique on a small scale to produce around 190 million cubic feet of gas per day from its remote North Arabia gas basin, where production began in 2018. The company has worked with international oil service companies Halliburton, Schlumberger, and Baker Hughes on the Jafurah field and the development of fracking technology to exploit it. Previously the lack of fresh water was a major inhibitor to shale development, but Amin Nasser, CEO of Aramco, said the company now has a process using seawater, which will be used in the Jafurah project. The company is also considering construction of a desalination plant.
Aramco chairman Yasir bin Othman al-Rumayyan says that the Jafurah development is expected to enhance the company’s leading position in the worldwide energy sector and help achieve its goal of being the world’s preeminent integrated energy and chemicals company. Baker Hughes in 2018 estimated that the country had recoverable shale gas reserves of 645 trillion cubic feet, which would give it the fifth-largest shale gas deposits in the world. If Aramco meets its targets for the Jafurah field, Saudi Arabia would become the world's third-largest producer, after the US and Russia, by 2030. MBS said that the development would earn, within 22 years, a net income for the government of about USD8.6 billion/year and provide an estimated gross domestic product of USD20 billion/year. It will make Saudi Arabia one of the most important gas producers in the world, in addition to being the most important oil producer. It is envisaged that, after satisfying domestic demand, Jafurah gas could be supplied to neighboring countries and could also help lead Saudi Arabia into the LNG export market.
We remind that, as MRC informed earlier, in October 2019, McDermott International announced that it had been awarded a contract by Saudi Aramco and Total Raffinage Chimie (Total) for their joint venture (JV) Amiral steam cracker project at Jubail, Saudi Arabia. Amiral is a JV in which Aramco holds 62.5% and Total the rest. The plant, designed to produce 1.5 million metric tons/year (MMt/y) of ethylene, will be one of the world's largest mixed-feed crackers.
Aramco and Total launched their USD5-billion Amiral JV project in October 2018. The steam cracker will be fed with a mixture of 50% ethane and refinery off-gases. It will supply ethylene to a downstream 1 MMt/y polyethylene manufacturing complex and other petrochemical products. The project aims to fully exploit operational synergies with the adjacent refinery, owned by Satorp, another JV between Aramco and Total. Third-party investors, including Daelim and Ineos, will locate plants at the value park adjacent to Amiral with a combined investment of USD4 billion. A final investment decision is expected in 2021.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
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