Developing large-scale upstream shale gas projects is not a priority for Saudi Arabia at the moment, according to industry sources who have been briefed by officials from the country’s national oil company Saudi Aramco.
Shale System C was lined up to be Saudi Arabia’s first large-scale project to develop upstream shale production, and is estimated to be worth $2bn.
It is currently at the study stage. Previously it was expected the main contract for the scheme would be tendered in mid-2018, but now some industry sources believe this could be an optimistic estimate.
“When contractors meet with officials, there’s no mention of the Shale System C development or any other shale projects,” says one source.
Conventional oil projects such as the $6bn Berri upstream development and the $3.5bn Marjan upstream scheme are where Aramco wants to see rapid progress, according to the sources.
“Aramco is keen to drum up interest in Berri and it wants to talk about Marjan,” says one source. “They don’t talk about the upcoming tender of any shale gas projects.”
Currently Berri is at the study stage and the main contract is expected to be tendered in 2024. The Marjan project has been divided into an onshore package and an offshore package.
The onshore package is estimated to be worth $2bn and front-end engineering and design (feed) work is being carried out.
The offshore package is estimated to be worth $1.5bn and is also at the feed stage.
Over recent years, Saudi Arabia has widely publicised its efforts to develop the capability to exploit its shale gas deposits.
In 2015, Aramco chairman Khalid al-Falih said the company had already invested $3bn in developing unconventional gas and had earmarked a further $7bn to be invested in shale gas schemes.
Saudi Arabia’s smaller unconventional projects – Shale Gas Development System A and Shale Gas Development System B – are currently under execution.
System A is expected to be completed before October 2017, is worth $200m and consists of a pipeline and gas gathering centre.
System B is worth $800m and consists of 50 wellheads and 50 flowlines.