RIYADH: Saudi Aramco has finalized agreements for the second phase of its Jafurah gas field development and the third stage of the expansion of its master gas system, awarding contracts exceeding $25 billion.
The company has granted 16 agreements for phase two development at Jafurah, worth a combined total of around $12.4 billion.
An additional 15 one-time complete contracts, worth around $8.8 billion, have been awarded to commence the phase three expansion of the master gas system, which delivers natural gas to customers across Saudi Arabia.
Additionally, 23 gas rig agreements valued at $2.4 billion and two directional drilling contracts worth $612 million have been granted.
In addition, between December 2022 and May 2024, 13 tie-in contracts at Jafurah, totaling $1.63 billion, were also awarded.
Aramco’s CEO Amin Nasser said the agreements signaled a new phase of development for two megaprojects that “will take our world-class national gas capabilities to the next level.”
Nasser added: “The first project is the third expansion of the master gas system. The system has been the backbone of industrial development in the Kingdom for nearly five decades.”
This phase involves adding 17 new gas compression trains and expanding the pipeline network by 4,000 km.
This infrastructure enhancement will increase the network’s capacity by 3.15 billion standard cubic feet per day and extend its reach to several new cities nationwide.
Cities from Jeddah to Jizan and Al-Kharj to Sudair will now receive gas from the system, catalyzing industrialization, stimulating economic growth, and generating new job opportunities for Saudis.
This expansion aligns with the Kingdom’s goal to derive 50 percent of its electricity from gas by 2030, and will provide ample feedstock for the petrochemical sector.
Nasser said: “The second project is phase two of development at Jafurah, the largest unconventional gas field in the Middle East.
“By generating (an) anticipated 2 billion cubic feet per day of sales gas by 2030, this bold initiative will strengthen Saudi Arabia’s position as one of the top national gas producers in the world, ushering in a new era of energy for the Kingdom.”
Saudi Energy Minister Prince Abdulaziz bin Salman said on the sidelines of the signing ceremony: “The project will be linked to 40 facilities, including electricity and water treatment plants and petrochemical production plants.”
The minister added that work with Aramco had developed and increased gas exploration and drilling projects.
He added: “We also seek to expand, taking into account the expansions that will come to our economy after 2030, and we have a duty to start working on them from now so that we are ready for the 2040 goals.”
The minister expressed confidence in achieving a significant reduction in the cost of energy production across various methods.
Prince Abdulaziz said: “No one will beat us in reducing the cost of energy production in all its forms.”
The minister discussed a strategic project with natural gas reservoirs that promises to deliver about 2 million standard cubic feet of gas daily, catering specifically to peak demand periods and allowing for storage during off-peak times.
He said: “It may surprise everyone that our gas production by 2030 will increase by 63 percent from 13.5 billion cubic feet per day to about 21.3 by 2030.”
In terms of environmental impact, the Kingdom’s methane emissions are noted at 0.05 percent, with recent international comparisons showing participating countries such as the US, Norway, and Canada at 0.02 percent, positioning them favorably in global methane emission rankings.
This underscores Saudi Arabia’s commitment to efficient energy production and responsible environmental stewardship amid significant production growth goals.
Prince Abdulaziz said: “We are the company with the lowest emissions of almost all international companies … whether in terms of second emissions such as carbon dioxide or even methane.”
The minister noted that proposed moves, as an approximate figure, should contribute about $20 billion annually to the domestic product.
He added: “We are working with Aramco to increase gas exploration and drilling projects in a way that meets the needs of the economy by 2030. Indeed, we will be ready from now to keep pace with the 2040 goals.”
The minister said that he had sent a letter to Aramco’s president assuring him that “the next expansion is coming.”
Prince Abdulaziz added: “Anyone who does not contribute or participate in buying Aramco shares will count his fingers of regret. I repeat it here with more confidence than I did before.”