Saudi Aramco’s award of $10 billion worth of contracts seems to be the spark of launching the world’s biggest shale gas field outside of the US.
Having battled with America’s shale oil producers for market share over the last decade, Saudi Arabia is now adopting the advanced low-cost techniques of its fracking rivals and is set to spend up to $100 billion on Jafurah to rapidly increase its domestic gas production.
The Kingdom is estimated to be sitting on the fifth-largest shale gas reserves in the world. Saudi Energy Minister Prince Abdulaziz bin Salman earlier said the Jafurah gas field will place the Kingdom third in the world in natural gas production by 2030.
Saudi Aramco Chief Executive Amin Nasser said Production is scheduled to begin within the next three years. The field will supply cleaner natural gas for domestic use in the Kingdom, along with feedstock for both petrochemical production, and crucially, low carbon hydrogen power.
The Jafurah project will not only aid the Kingdom’s environmental ambitions but will also support its petrochemicals industry. “its ethane and liquified natural gas are highly valuable feedstocks for the Kingdom’s petrochemical’s industry,” the Aramco chief said.
Jafurah is expected to contribute to Saudi Arabia’s target of producing half of its electricity from gas and half from renewables as it pursues its 2060 net-zero targets. Indeed, Jafurah alone is forecast to replace up to 500,000 barrels of oil a day that would otherwise be used for domestic consumption.
All this serves the goals of the Kingdom’s Vision 2030 program to diversify the economy from crude oil and sharply reduce its carbon footprint, even if the scheme will enable the Kingdom to increase its crude exports.
Regarding exporting the gas from Jafurah, it seems the kingdom has no plans to export gas. the Saudi Energy Minister Prince Abdulaziz bin Salma said “We will keep our gas to ourselves”.
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