Shale gas faces a tight fight

17 July 2014

As Saudi Aramco further invests in exploiting tight gas reserves, shale gas is being put on the back burner

As Saudi Aramco’s various industrial sectors grow ever stronger, it is clear the company is ensuring future generations have enough gas feedstock to power its new facilities.

The US’ Foster Wheeler has been awarded a long-term contract that will see it offer engineering services for Aramco’s tight gas operations for the next five years.

Tight gas has now been earmarked by Aramco as a cheaper means of developing gas resources than shale and the company believes it can develop gas at about $2-$3 a million BTUs. If this figure is feasible, then it would offer savings of well over $10 a million BTU compared with shale gas production.

Tight gas production is similar to shale gas and will still require the hydraulic fracturing (fracking) of rock to access the resource. Where tight gas offers savings is that it is usually found within sandstone formations, which makes it easier to frack.

The costs of producing shale will have to come down before it becomes an attractive proposition for major production and it may even be that tight gas offers a far more agreeable and affordable solution in the future.

A study by the US’ Schlumberger states that the kingdom’s tight gas is deeper and more difficult to access than in North America, but this should not be a problem. Aramco’s non-associated gas reserves are enormous, but unlike its oil, it is far more difficult to access or contains high levels of sulphur.

The UK/Dutch Shell Group pulled out of the Kidan gas field in the Empty Quarter due to the difficulties associated with producing gas in a remote area with a sulphur content of more than 30 per cent. Aramco has not commented on whether it will push ahead at Kidan. Gas there will be expensive to produce and Aramco has already indicated with shale that it is not prepared to invest in expensive gas. 

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