The prospective gas project at Kidan in the Empty Quarter of Saudi Arabia is a good example of how far Riyadh is prepared to go to increase domestic gas production.
Ten years ago, the prospect of spending $4bn on a scheme that would produce 300 million cubic feet a day (cf/d) of sour gas would have seemed inconceivable for Saudi Aramco. Things have changed, however, and gas is now the number one priority for the state-owned oil major.
The next decade will be dominated by gas projects in Saudi Arabia and this is going to offer international oil companies (IOCs) and international contractors some excellent opportunities, particularly those with an aptitude for non-conventional gas exploration, production and processing.
Many IOCs have previously expressed a desire to work closer with Saudi Aramco on upstream projects in the kingdom. The Kidan scheme is a joint venture between Aramco and the UK/Dutch Shell Group. There has been other, less successful, exploration partnerships in the Empty Quarter.
With non-conventional gas sources becoming more popular and cheaper to extract, Aramco could decide to form more joint ventures outside of the Empty Quarter if it means fast-tracking the fields to the production phase.
Riyadh has realised that with crude prices over $100 a barrel and record oil revenues, the time is right to roll out an industrialisation programme to create jobs for Saudi nationals.
To achieve this, the kingdom will have to increase the crude it can sell on the open market and find a substitute resource to fuel power stations and provide feedstock for heavy industry. That resource can only be gas.