Saudi gas drive on unconventional route

18 March 2021
Aramco's unconventional resources strategy has substantially reduced operational costs and successfully complements the company's conventional gas programme, says Khalid M al-Abdul Qader

MEED's unconventional energy report also includes:

> Region makes strides in unconventional efforts
> Unconventional energy development takes off

Perhaps the best way to understand the unconventional potential of any given country is to first review the nature of its existing hydrocarbon resources.

In 2013, Stephen Holditch said: “Any oil and gas basin in the world that has produced large volumes of hydrocarbons from conventional reservoirs over the past 100 years should have an order of magnitude more oil and gas in unconventional reservoirs waiting to be discovered and developed.”

As Saudi Arabia is home to some of the largest conventional fields in the world, such as Ghawar, it is not unreasonable to expect the kingdom to have an equally large unconventional potential waiting to be unlocked.

With that in mind, Saudi Aramco has pursued an unconventional gas programme in Saudi Arabia with great success, focusing on three geographical locations: North Arabia, South Ghawar and Jafurah.

Exploration and appraisal activities continue to yield successful discoveries, both in the North Arabia and South Ghawar areas
Khalid M al-Abdul Qader, Saudi Aramco

Critical purpose

The kingdom's unconventional gas programme strategically complements its conventional gas programme. It serves the critical purpose of displacing the domestic burning of liquid hydrocarbons for power generation with natural gas, a cleaner and more environmentally sustainable source of energy, which is associated with significant production of condensate and natural gas liquids.

With it, the company is able to feedstock the expanding downstream petrochemicals industry within the kingdom, all while freeing up more of Aramco’s crude oil for higher-value applications.   

Several key enablers have helped accelerate commercialisation of unconventional resources (UR). We executed a systematic de-risking strategy tailored to the UR business and, crucially, developed a proper understanding of subsurface geology up front.

Surveys show that 52 per cent of poor well performance within North American Shale plays is caused by a failure to understand the sub-surface. That is why Aramco invested in seismic exploration, well logs and core data capture from early wells to assess Saudi Arabia’s vast reservoirs – and optimise the programme accordingly.

As a result, the company has optimised the efficiency of its drilling and stimulation activities, enhanced well performance and significantly reduced well costs. Aramco’s well productivity is in the top quartile when compared with similar US analog shale plays.

Aramco also developed a fit-for-purpose, asset-based business model, integrating required functions into one organisation to provide autonomy, agility and quick decision making.

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Economically viable

Meanwhile, a robust supply chain was established to provide materials and services at lower cost. The UR programme is economically viable in Saudi Arabia as a result, with several discoveries announced in the North Arabia, South Ghawar and Jafurah areas.

Since 2018, North Arabia gas supply has supported power generation at the Waad al-Shamal industrial project, where the development of five satellite processing facilities offsets liquid burning.

The company has also targeted a tight sand fairway situated south of Ghawar, leveraging its proximity to existing infrastructure, and in 2020 Aramco awarded three major packages to engineering, procurement and construction (EPC) contractors to start construction activities there.

The first package was awarded to JGC Gulf International Company with a scope to design and build the gas processing facilities, industrial support facilities and downstream tie-ins.

The second major package was awarded to CAT Group with a scope to construct well flow lines and tie-ins, and downstream gas transmission pipelines.

The third package was awarded to Tamimi Group, which will be responsible for the early works and temporary construction facilities.

In the meantime, exploration and appraisal activities continue to yield successful discoveries, both in the North Arabia and South Ghawar areas.

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The Jafurah project, situated east of the Ghawar field, targets a massive 170 kilometre by 100km source rock reservoir associated with abundantly rich hydrocarbon resource.

After receiving regulatory approval to develop the Jafurah unconventional gas field in 2020, development plans are under way to deliver the first increment of Jafurah gas by 2024.

Aramco is now evaluating several options to process Jafurah hydrocarbons to optimise costs, in the name of prudent financial management.

In the development of its UR programme, Aramco successfully implemented an end-to-end supply chain strategy that supported the rapid growth of its operational requirements.

That has allowed Aramco to capitalise on existing service providers in the region, developing unique contracts with flexible and cost-effective parameters – and capitalising on the large volume of planned operations related to drilling and stimulation.

It is a strategy that has substantially reduced our operational cost, and made Saudi Arabia’s UR business an attractive proposition.


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