Saudi Aramco to develop first offshore field in Red Sea

12 November 2013

Non-associated gas field called Ahmar-1 expected to be fast-tracked by state-owned oil major

Saudi Aramco is planning its first full offshore development of a gas field close to the city of Duba on the Red Sea coast of the kingdom. The field, known as Ahmar-1, is a non-associated gas field that was discovered in 2012 and is 26 kilometres northwest from Duba.

The scheme is in at an embryonic stage, but an early scope of works suggests that seven wells will be drilled. Four of the wells will be deep water, with the other three in shallower waters closer to shore.

“This potential field development is in its early stages, but there is no doubt that Aramco is committed to fast-tracking the scheme,” says an oil and gas source based in Saudi Arabia. “There has been no disclosure of how much gas the field is expected to produce, but it is obviously significant enough to warrant deep water drilling.”

A gas plant to process the offtake from the field is expected to be built in Duba, but there is still some uncertainty about what will happen to the sales gas. A pipeline network has been mooted that will transport the gas to industrial cities along the Red Sea coast. However, officials from the Tabuk Province, where Duba is located, are said to favour the construction of a large power plant next to the gas processing facility, which can then transport electricity to neighbouring regions.

“All of the plans are in the early stages and no decision has yet been made in regards to what will happen to the gas,” says a Saudi executive familiar with the scheme. “The Tabuk Province favours a power plant over sending the gas to cities such as Yanbu, Jeddah and Jizan via a pipeline.”  

Aramco has conducted geophysical surveys in the Red Sea basin since 2009, mostly in the shallow waters off Tabuk, but has progressively focused on deeper deposits in more challenging locations.

The project underlines chief executive officer Khalid al-Falih’s assertion in 2012 that Aramco’s initial focus for its Red Sea operations will be non-associated gas.

The company has not made public estimates of the Red Sea’s potential, but there could be up to 100 billion barrels of oil equivalent under the seabed, equal to a 38 per cent increase on Saudi Arabia’s proven reserves of 267 billion barrels.

The prospect of multiple offshore fields combined with the development of a major onshore processing hub is attracting international contractors looking to work on the Red Sea coast. Deep-water oil production means companies with extensive operations in Europe’s North Sea and the Gulf of Mexico, off the US coast, will be well positioned to secure work when tenders are released.

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