Saudi Aramco is preparing to move forward with its plans to develop non-conventional gas in Saudi Arabia and is planning to release a tender for a scheme in the north of the kingdom.

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.

Four engineering, procurement and construction (EPC) contractors have submitted prequalification documents for a contract to build surface facilities in the northern region. They are:

• GS Engineering & Construction (South Korea)  
• JGC Corporation (Japan)
• Maire Tecnimont (Italy)
• SNC Lavalin (Canada)

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

“[The project] being tendered IK-EPC means there has not been as much interest from contractors as if it was an open tender,” says a source familiar with the project.“

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 capacity 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.

Saudi Aramco was not available for comment when contacted by MEED so there is no confirmation of the exact location or geological make-up of the sub-surface reservoirs and whether they are shale or tight gas.

The techniques involved in exploiting shale and tight gas are very similar and both involve fracking. However, there are far lower cost implications for tight gas as reservoir frackings easier due to it being contained within sandstone.

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.

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.

MEED reported in May that each well will cost between $8m-$10m putting the initial investment for 50 million cf/d would be $80m-$100m. The wells would need to be re-drilled every 18-24 months depending on depletion rates.     

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.