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Aramco awards US$25 billion contracts for gas expansion
Master Gas System connects key gas production and processing sites throughout Saudi Arabia through network of pipelines
Michael Marray 10 Jul 2024

Saudi Aramco has awarded contracts worth more than US$25 billion for its strategic gas expansion programme.

The contracts relate to phase two development of the vast Jafurah unconventional gas field, phase three expansion of Aramco’s Master Gas System, new gas rigs and ongoing capacity maintenance.

The company has awarded 16 contracts, worth a combined US$12.4 billion, for phase two development at Jafurah. The work will involve construction of gas compression facilities and associated pipelines, expansion of the Jafurah Gas Plant including construction of gas processing trains, and utilities, sulfur and export facilities.

It will also involve construction of the company’s new Riyas Natural Gas Liquids (NGL) fractionation facilities in Jubail – including NGL fractionation trains, and utilities, storage and export facilities – to process NGL received from Jafurah.

Another 15 lump sum turnkey contracts, worth US$8.8 billion, have been awarded to begin the phase three expansion of the Master Gas System, which delivers natural gas to customers across Saudi Arabia. The expansion, being conducted in collaboration with the Ministry of Energy, will increase the size of the network and raise its total capacity by an additional 3.15 billion standard cubic feet per day (bscfd) by 2028, through the installation of around 4,000 kilometres of pipelines and 17 new gas compression trains.

An additional 23 gas rig contracts worth US$2.4 billion have also been awarded, along with two directional drilling contracts worth US$612 million. Thirteen well tie-in contracts at Jafurah, worth a total of US$1.63 billion, have been awarded between December 2022 and May 2024. 

Aramco targets sales gas production growth of more than 60% by 2030, compared to 2021 levels.

Meeting rising demand

“These contract awards demonstrate our firm belief in the future of gas as an important energy source, as well as a vital feedstock for downstream industries," says Aramco president and chief executive officer Amin H. Nasser. "The scale of our ongoing investment at Jafurah, along with the expansion of our Master Gas System, underscores our intention to further integrate and grow our gas business to meet anticipated rising demand."

The Jafurah unconventional gas field is estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion stock tank barrels of condensate. Phase one of the Jafurah development programme, which commenced in November 2021, is progressing on schedule with initial start-up anticipated in the third quarter of 2025.

Aramco expects total overall lifecycle investment at Jafurah to exceed US$100 billion and production to reach a sustainable sales gas rate of 2 bscfd by 2030, in addition to significant volumes of ethane, NGL and condensate.

The Master Gas System is an extensive network of pipelines that connects Aramco’s key gas production and processing sites throughout the kingdom. Its expansion will increase access to domestic gas supplies for customers in the industrial, utility and other sectors – providing a lower greenhouse gas emission alternative to oil for power generation. From 1982, the network transported associated gas, also known as “waste gas” released during oil production, instead of being flared, illustrating Aramco’s innovation and early adoption of solutions that help mitigate emissions.

The network, which now transports associated gas and sales gas, has helped Aramco achieve near-zero routine gas flaring and maintain a flare volume of less than 1% of total raw gas production since 2012, contributing to the company having one of the lowest upstream carbon intensities in the industry.

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