Aramco pushes on with $100bn gas project
Saudi Aramco confirmed on August 15 that it expects to bring on stream the $100bn Jafurah onshore unconventional gas project in 2025, targeting an output of 2bn ft3/day (20.7bn m3/year) by the end of the decade.
Situated east of the supergiant Ghawar oilfield, Jafurah is Saudi Arabia's largest deposit of unconventional gas, with an estimated 5.7 trillion m3 in reserves. The project is set to play a central role in Riyadh's long-term strategy for expanding gas production, in order to cut oil burn in power generation, freeing up some 1mn barrels/day of supplies for export, and provide extra gas feedstock for the kingdom's growing petrochemicals sector, and for developing low-carbon hydrogen and ammonia.
The second phase of Jafurah's development is expected to come online in 2027, and the completed plant will have an overall raw gas processing capacity of 3.1bn ft3/d.
Saudi Arabia hit a milestone in its gas strategy in 2022, when its dry natural gas production surpassed 4 trillion ft3 for the first time ever, a year after Aramco commissioned the Fadhili plant, enabling it to process gas from non-associated fields in its east. But Jafurah will account for much of the growth going forward.
Presenting the national oil company's second-quarter results, CEO Amin Nasser said the target was a 50% expansion in gas supply over the next eight years.
Aramco also noted that construction of the Hawiyah Unayzah gas reservoir storage facility had reached an advanced stage, with the injection phase nearing completion. The project, representing Saudi Arabia's first underground gas storage site, is set to enable up to 2bn ft3/d of gas to be injected into the national grid by 2024.
The oil company also aims to finish up the Haradh and Hawiyah compression projects by the end of this year, and the Hawiyah gas plant by 2023.
Aramco saw net profit leap to 181.6bn riyals ($48.4bn) in the second quarter, from 95.5bn riyals in the same period last year, on the back of soaring oil prices and a climb in hydrocarbon production to 13.3mn barrels of oil equivalent/day, from 11.6mn boe/d. EBIT surged to 328.2bn riyals, from 181.8bn, while free cash flow expanded to 129.8bn riyals, from 84.7bn. In line with its investor commitments, the company paid out a further 70.3bn riyals in dividends during the three-month period.
"Our record second-quarter results reflect increasing demand for our products – particularly as a low-cost producer with one of the lowest upstream carbon intensities in the industry," Nasser commented.
Despite ongoing global market volatility and economic uncertainty, the CEO said that events this year supported its "view that ongoing investment in our industry is essential – both to help ensure markets remain well supplied and to facilitate an orderly energy transition."
"But while there is a very real and present need to safeguard the security of energy supplies, climate goals remain critical, which is why Aramco is working to increase production from multiple energy sources – including oil and gas, as well as renewables and blue hydrogen," he said.
Aramco is embarking on the largest capital programme in its history, Nasser said, with the company investing 35.1bn riyals in the second quarter alone. It projects full-year capex to come in at towards the lower end of its 150-187.5bn riyal guidance, however.