Saudi Aramco awards Foster Wheeler tight gas contract

14 July 2014

Engineering consultancy to provide design services for unconventional gas initiative in Saudi Arabia

Saudi Aramcohas awarded the US’ Foster Wheeler a long-term contract to carry out front-end engineering and design (feed) for its unconventional gas development plans across Saudi Arabia.

The award comes after Aramco 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 per million BTU of gas.

The unconventional gas feed contract will run for five years although the amount of man-hours per year has not been specified.

“This award shows the change of direction Aramco is taking away from shale gas and into less costly formations across the kingdom,” says an oil and gas source based in Saudi Arabia.

Aramco are looking to develop tight gas in the same locations as shale gas. They are:

  • The Empty Quarter
  • South Ghawar in the Eastern Province
  • Jalamid in the northern desert region

MEED reported in May that Aramco was delaying its foray into shale gas production due to the costs associated with producing the resource in the kingdom. Much of Saudi Arabia’s shale gas deposits are in remote and extremely dry areas meaning that there is not enough water to carry out extensive hydraulic fracturing (fracking) that is the principal method of producing the resource.

Tight gas will also require extensive fracking to be carried out, but the resource is usually found in sandstone making it easier to access than shale. This is likely to be the area where Aramco believes it can save money in the production process.

Producing tight gas will still involve water being mixed with sand or chemicals and blasted into wells at high pressure. The rocks are fractured and gas is released. This would mean that water would still have to be piped in to be used in the fracking process.

Aramco has been researching tight gas for several years with the US oil field services giant Schlumberger carrying out testing for the company. Schlumberger released a technical paper in 2011 stating that the tight gas wells in the kingdom were deeper and more complex than in North America and required far higher precision in drilling.  

Despite the focus on tight gas Aramco are still committed to developing shale, but at a slower rate than previously envisaged. The long-term contract awarded to Foster Wheeler was originally going to focus on shale gas, but this has now been amended.

Saudi Aramco and Foster Wheeler were unavailable for comment when contacted by MEED.

The award comes after the UK/Dutch Shell Group said it was pulling the plug on the South Rub al-Khali Company Limited (SRAK) gas joint venture it has with Aramco.

The joint venture was due to develop the Kidan gas field in the Empty Quarter, but the Shell has pulled the plug due to concerns about the viability of large-scale production from the Kidan gas field, as well as escalating costs due to the field’s remote location.

It is not clear whether Aramco will develop the Kidan field alone or will try and incorporate it into its new unconventional gas initiative.

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