The UK/Dutch Shell Group is finally pulling the plug on the South Rub al-Khali Company Limited (SRAK) gas joint venture it has with Saudi Aramco, according to the UK media.
MEED reported in June 2013 that the oil company was giving serious consideration to exiting the partnership. Reasons include concerns about the viability of large-scale production from the Kidan gas field, as well as escalating costs due to the fields remote location in the Empty Quarter of Saudi Arabia.
SRAK has been carrying out gas exploration activities across about 210,000 square kilometres of the Empty Quarter. This equates to an area the same size as the UK.
SRAK discovered commercial quantities of gas when drilling its fourth exploratory well, named Kidan 6, in contract area 1 near the remote Shaybah oil field in 2008. Shell took over the licence with Aramco when Frances Total pulled out of the deal in 2008.
As much as 8 trillion standard cubic feet of gas is estimated to be contained in the Kidan field, although this figure has been disputed, with some studies suggesting it has less and others saying it could contain more.
The main issue with the gas from Kidan is the high sulphur content. Kidan gas has hydrogen sulphide (H2S) content of about 35 per cent, which means any development of the field will require a large sulphur treatment plant to be constructed, as well as a gas processing facility.
Shell has stated that it intends to continue to pursue other investments in the kingdom. The firm has a refinery joint venture with Aramco and is providing technology for the $8bn Jizan gasification project in the southwest of the kingdom.
Where this now leaves the Kidan gas project is unclear. Design tenders were on the verge of being floated, but was put on hold
The main issue with the gas from Kidan is the high sulphur content. Kidan gas has hydrogen sulphide (H2S) content of about 35 per cent, which means that any development of the field will require a large sulphur treatment plant to be constructed, as well as a gas processing plant.
The proposed initial first phase involved developing gas production of about 300 million cubic feet a day (cf/d). However, the nameplate capacity for the majority of the infrastructure constructed to process the gas will be closer to 500 million cf/d.
The scope included units to handle condensate stabilisation, gas sweetening, dehydration, dew point and sales gas compression.