HomeNewsAramco Awards $25 Billion in Contracts for Strategic Gas Expansion

Aramco Awards $25 Billion in Contracts for Strategic Gas Expansion

7/1/2024

(P&GJ) — Aramco has announced contracts totaling over $25 billion to advance its strategic gas expansion efforts. This initiative aims to achieve a more than 60% increase in sales gas production by 2030 compared to 2021 levels.

The contracts are focused on several key areas, including the phase two development of the expansive Jafurah unconventional gas field, the third phase expansion of Aramco’s Master Gas System, and the deployment of new gas rigs alongside ongoing capacity maintenance.

Aramco President & CEO Amin H. Nasser emphasized the significance of these contracts, stating, "These awards underscore our commitment to gas as a crucial energy source and feedstock for downstream industries. Our investments in Jafurah and the Master Gas System highlight our strategy to integrate and expand our gas business in anticipation of rising demand. This complements our portfolio diversification efforts, creates new employment opportunities, and supports Saudi Arabia's transition towards a lower-emission power grid, emphasizing gas and renewables over liquids-based power generation."

Contract Details:

  • Jafurah Development: Aramco has awarded 16 contracts totaling approximately $12.4 billion for phase two of the Jafurah development. This includes the construction of gas compression facilities, pipelines, and expansion of the Jafurah Gas Plant to accommodate gas processing and utilities. Additionally, new Riyas Natural Gas Liquids (NGL) fractionation facilities will be constructed in Jubail.
  • Master Gas System Expansion: An additional 15 contracts, valued at around $8.8 billion, have been awarded to expand the Master Gas System. This expansion, conducted in collaboration with the Ministry of Energy, will increase network capacity by 3.15 billion standard cubic feet per day (bscfd) through the installation of pipelines and gas compression trains.
  • Gas Rigs and Drilling Contracts: Aramco has also awarded contracts totaling $2.4 billion for 23 gas rigs and $612 million for directional drilling, along with $1.63 billion for 13 well tie-ins at Jafurah between December 2022 and May 2024.

Progress and Future Outlook:

  • Jafurah Development: The Jafurah unconventional gas field, estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion Stock Tank Barrels of condensate, is progressing as planned. Phase one of development is expected to commence operations in the third quarter of 2025, with total investment exceeding $100 billion. Aramco aims to achieve sustainable sales gas production of two billion standard cubic feet per day by 2030, in addition to significant ethane, NGL, and condensate outputs.
  • Master Gas System: Aramco’s extensive Master Gas System, initially designed to transport associated gas released during oil production, now facilitates the transportation of associated and sales gas. This network has significantly contributed to Aramco's achievement of near-zero routine gas flaring since 2012, underscoring its commitment to reducing upstream carbon intensity.

In conclusion, Aramco’s ongoing investments in gas infrastructure underscore its strategic vision to meet growing energy demands sustainably while supporting Saudi Arabia’s energy transition objectives.

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