Saudi Aramco has extended the deadline for the engineering, procurement and construction contract for the first non-conventional gas project in northern Saudi Arabia until mid-February.

The scheme plans to provide 200 million cubic feet a day (cf/d) of gas for the power plant being built at Waad al-Shamal phosphates city by the Saudi Electricity Company (SEC). However, the initial tender will cover 50 million cf/d.

Only two engineering, procurement and construction (EPC) contractors are left in the bidding for the scheme which will produce gas from tight formation close to Waad al-Shamal.

The two contractors left bidding for the scheme are:

“The two contractors remaining will have another two weeks to formulate bids,” says an oil and gas source working in Saudi Arabia. “The original deadline was the end of January.”

The scheme is being tendered on a lump-sum turnkey basis and is being offered as an in-kingdom EPC only. This means all the engineering and project management to be carried out by personnel based in Saudi Arabia.

The scope of works will include the EPC of 10 wellheads, 10 two-kilometre, 6-inch flowlines, scraping facilities and a metering station. A gas-gathering facility with a capacity of 50 million cf/d will also be built, which will include an inlet manifold, high- and low-pressure inlet separators, compressors and a dehydration unit. A pipeline connecting the gas-gathering centre to Waad al-Shamal will also be built.  

At Waad al-Shamal, a control centre will be built, along with process and control equipment. Enough space will be left to accommodate four more gas-gathering centres in the future, each with a capcity of 50 million cf/d.

All the surface facilities are also expected to be skid-mounted, meaning they can be transferred elsewhere when the reservoirs have depleted.

The budget for the initial contract is as yet undetermined, but is expected to be several hundred million dollars. This does not include the cost of any sub-surface activities, including the fracturing (fracking) of the rock to release the gas.

Aramco has said it plans to put its shale gas aspirations on the backburner and concentrate instead on tight gas formations where the productions costs could be as little as $2-$3 a million BTU of gas.

The most likely area for exploitation is at Turaif, close to the Jordanian border. This means the formations in question could be similar to the Risha tight sandstone wells in Jordan being explored by the UK’s BP.

If the formation is tight sandstone and is similar to Risha, then some experts believe each well could produce 20-30 million cf/d and would be much easier to exploit than shale gas.

The big question that remains is where the water will be coming from. Any form of exploiting non-conventional gas requires large volumes of water for the fracking process and, therefore, needs water supply wells and water disposal wells. Water handling facilities will also need to be built and all of this could come in a later EPC contract.

The two options would be to either import the water through a pipeline or truck, or to source it from the region itself. It is not known whether an aquifer has been discovered in close proximity to gas fields. All formations are different, but the initial 50 million scf/d of gas would require 500-1,000 barrels a day (b/d) of water. A road tanker can hold 200 b/d so trucking water in as a temporary measure is not unfeasible.

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