Saudi Arabia Entering the Shale Gas Business With New Export Pipelines Required

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Saudi Arabia Entering the Shale Gas Business With New Export Pipelines Required

Thu, 02/27/2020 - 09:51
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Shale gas drilling and stock market (copyright by Shutterstock/LEEDDONG)
Shale gas drilling and stock market (copyright by Shutterstock/LEEDDONG)

Adopting the motto "if you can't beat them join them" Saudi Aramco is at work developing he biggest shale gas development outside of the United States. Chief Executive Officer Amin Nasser said this past Monday that the aim is to boost domestic gas supply and end the burning of oil at its power generation plants, Chief Executive Officer Amin Nasser told Reuters on Monday.

It was just a few years ago when the fracking boom swept the United States that Aramco fought a price war designed to put the upstart Americans out of business. With the discovery of the gigantic Jafurah shale gas field, containing an estimated 200 trillion cubic feet, the country has adopted the techniques developed in U.S. fields. The Saudi state oil group is working with international oil service companies such as U.S.-based Schlumberger, Halliburton Co. and Baker Hughes Co. on the field and to develop the technology to fracture the rock and release the locked-in oil and gas.

The Jufarah field is near the Gulf coast, so has relatively easy access to seawater, which will have to be lightly treated before using in fracking, Nasser said. It is also close to the world’s largest oilfield, Ghawar, so has easy access to existing energy infrastructure. Aramco has also identified local sand that can be used for fracking.

The development will position Saudi Arabia as a gas exporter, Nasser said. The preference for exports would be through pipelines to nearby countries rather than developing costly liquefied natural gas export terminals, he added. 

Aramco plans to invest $110 billion to develop Jafurah and expects production to start in early 2024. Output would reach around 2.2 billion cubic feet per day of sales gas by 2036.

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