The US shale gas revolution has been credited with the recent upturn in fortunes for the countrys hydrocarbons industry.
Such is the current level of shale production, Washington is developing plans to export the resource as liquefied natural gas (LNG). However, there are also plans to spend as much as $150bn on new petrochemicals facilities.
The success of shale gas has taken many by surprise, not least ExxonMobil, the US largest oil company, which was busy building LNG receiving terminals to accept Qatari gas only a few short years ago.
Saudi Arabias plans to emulate the US in shale production are now firmly on track and there is a lot of activity regarding engineering contracts, as well as long-term studies on how best to utilise this unconventional resource.
It is also clear, however, that Saudi Aramco is fully aware that the potential development of domestic shale gas is not going to be the same game-changer it was in the US.
Saudi Arabia undoubtedly needs gas and consumption estimates for the end of the decade indicate that as much as 16 billion cubic feet a day (cf/d) will be required to meet domestic consumption. Aramco presently provides almost 10 billion cf/d, with another 2.5 billion cf/d of conventional gas due to come onstream when the Wasit Gas Development is completed. This means a shortfall of 3.5 billion c/f and it is extremely unlikely the kingdoms shale gas sector will be able to make that provision within the next six years.
Shale gas production works best when the wells are coordinated so they work together. This takes a lot of planning and extensive studies to ensure potential formations contain no hidden surprises. Shale gas will not be cheap, but if developed properly it can make a truly significant contribution to the kingdoms energy mix for decades to come.
Aramco is fully aware that its potential development of domestic shale gas is not going to be the game-changer it was in the US