New resources found in Riyadh’s Empty Quarter region will help meet burgeoning domestic demand
Saudi Aramco chief executive Khalid al-Faleh said recently that the oil giant would not be bringing on any new oil capacity until 2015.
While this news was seized upon by the world’s media, the shift away from developing new oil production capacity has been coming for a while. Anyone who knows about Aramco knows that all their recent upstream activities have been about gas.
Aramco has ramped up its non-associated gas field development to such an extent that it has now spent more than $10bn developing its fields off the Gulf coast.
In 2008, Aramco also formed a joint venture with the UK/Dutch Shell to develop potential non-associated sour gas fields in the Empty Quarter of Saudi Arabia.
Since the exploration started, commercial levels of gas have been found in Kidan, located about 50 kilometres away from Mecca. Australian firm WorleyParsons will now carry out a study on the best way to exploit the resource.
It is still early days for the project, but if the partners decide on pursuing full production, then it will quickly turn into an $8bn project.
The gas is similar in sourness to the Shah gas field in Abu Dhabi, so infrastructure will have to be built that can process sulphur. This will not be cheap. Aramco and Shell should make good partners for this scheme and it will help that Shell has a sound track record in sour gas exploration and extraction.
No indication has been given as to how much gas is available at the Empty Quarter concession, more details will become known when WorleyParsons finishes the initial study.
One thing is certain, though. With the kingdom’s domestic gas demand booming, however much gas the firms produce will be immediately put to use.
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