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29 March 2024

Saudi to boost gas output by more than 50% in 2020

The GCC's hydrocarbon exports are expected to increase from $323bn in 2009 to $419bn this year. (AFP)

Published
By Nadim Kawach

Intensified exploration and new recovery technology will boost Saudi Arabia’s gas production by more than 50 per cent in 2020 as the world’s oil superpower races to meet soaring domestic demand, its state oil operator has said.

Massive investments in exploration and drilling programmes have already resulted in a sharp rise in the Gulf kingdom’s natural gas reserves to nearly 275 trillion cubic feet (tcf) at the end of 2009 from around 181 tcf in 1990, the government-owned Saudi Aramco said in its 2009 report released this week.

The new discoveries and higher recovery rates also pushed up the country’s non-associated gas deposits to more than 50 per cent of the total gas resources at the end of last year from about 25 per cent in 1990, it said.

“Finding additional gas reserves is a priority for Saudi Aramco, and our exploration programme has yielded tremendous success over the years. We have set ourselves the goal of discovering between three tcf and seven tcf of additional non-associated gas reserves annually, a figure we far exceeded in 2009 by adding nearly 13.2tcf,” the report said.

“We have made similar spectacular gains in the production of gas. In 1981, raw gas production was 1.65 billion cubic feet per day. In 2009, raw gas production reached 8.6 billion cubic feet, and for the first time… the production of non-associated gas was greater than the production of associated gas.  We project overall gas production levels to exceed 13 billion cubic feet per day by 2020.”

Saudi Aramco, the world’s largest oil producing firm which controls over a fifth of the global crude wealth, said demand for gas is growing rapidly in Saudi Arabia and this should prompt the kingdom to step up efforts to find more gas.

In addition to its environmental advantages, natural gas is essential for the kingdom's electricity generation, desalination plants, petrochemical facilities and other industries, said the company, which controls the Saudi hydrocarbon sector.

It noted that gas operations began in the 1970s with the creation of the Master Gas System, which was designed to make productive use of the gas associated with oil production that previously had been flared.

Since then, the gas programme has undergone a dramatic transformation, evolving to include exploration for and production of non-associated gas, the construction of grassroots gas plants and the expansion of existing plants, and the growth of the domestic petrochemical industry, the report said.

It said work continued in 2009 by its four upstream gas joint ventures: South Rub' Al Khali Company (SRAK), Luksar Energy Limited (Luksar), Sino Saudi Gas Limited (SSG) and EniRepSa Gas Limited (EniRepSa).

“All four joint ventures have exceeded their minimum seismic acquisition commitments and completed 24 of the 27 exploration wells required in the first exploration period. Of the three remaining wells to be drilled, SRAK is in the process of drilling two wells (Zaynan-2 and Kidan-7) and EniRepSa is selecting the location for its last commitment well, expected to start in 2010.”

The report said the most significant gas project on the near horizon is Aramco’s Karan programme, the first non-associated offshore gas increment in its history. When completed in 2013, the increment will be capable of delivering 1.8 billion cubic feet per day of raw gas via a subsea pipeline to the Khursaniyah Gas Plant.

“In addition to finding and developing new gas reserves, we are deploying technologies to raise production levels and maximise recovery in existing wells.”

According to the report, one of the new techniques is hydrajetting which the Company has successfully tested on one field and is in the process of applying to more reservoirs. “Alternative techniques, based on hydrajetting technology, have been recently applied in a number of underperforming horizontal gas producers with excellent results,” it said.

Saudi Arabia has the world’s fourth largest gas reserves after those in Russia, Iran and Qatar but a large part of them are associated with oil, making their separation a costly process. Increasing gas output also entails higher crude production, which will affect Riyadh’s commitment to OPEC’s output quotas.

Nearly a decade after they were awarded massive concession areas in the Empty Quarter (Rub Al-Khali desert), Shell and several other companies have failed to find major quantities of gas, prompting France’s Total oil giant to withdraw from the largest consortium in 2008.