Saudi Aramco produces first unconventional gas at South Ghawar

Image courtesy: Christopher Pike/ Getty Images

Saudi Aramco, the world’s biggest oil producer, has produced the first unconventional tight gas from its South Ghawar operational area two months ahead of schedule as the energy giant seeks to boost its gas production.

“This development supports Aramco’s strategy to increase gas production by more than 50 per cent, over 2021 levels, through 2030, subject to domestic demand,” the state-owned energy firm said in a statement.

Commissioned facilities at South Ghawar can process 300 million standard cubic feet per day (scfd) of raw gas and 38,000 barrels per day (bpd) of condensate.

Aramco said it will continue its work to more than double the overall processing capacity to deliver 750 mmscfd of raw gas from South Ghawar.

“This first production of unconventional tight gas from South Ghawar is a milestone that demonstrates real progress on our gas expansion strategy, which we believe has a role to play in meeting the kingdom’s needs for lower-emission energy and supporting growth in the chemicals sector,” said Nasir Al-Naimi, Aramco Upstream president.

“The ability to commence production two months ahead of schedule and below budget is a testament to the unwavering dedication of our people and their determination to continuously enhance our Upstream operations.”

The successful production of tight gas at South Ghawar comes nearly six years after Aramco commenced production at the North Arabia field.

The company also said work is progressing at the Jafurah unconventional gas field, which is the largest liquid-rich shale gas play in the Middle East.

Tight gas refers to a type of unconventional gas – which requires advanced extraction methods – found in reservoir rocks with low permeability, most often sandstone.

Aramco boosts LNG portfolio

Meanwhile, Aramco is expanding its portfolio into liquefied natural gas (LNG) at a time when global demand for the fuel has surged, particularly in Europe which is replacing reduced pipeline supplies from Russia.

The company forayed into the global LNG with the acquisition of a minority stake in EIG Partners’ MidOcean Energy in a deal that was valued at $500m in September.

The state-owned energy giant has the option to increase its shareholding and associated rights in MidOcean in the future. The completion of the deal is subject to regulatory approvals.

MidOcean is currently in the process of acquiring interests in four Australian LNG projects, with a growth strategy to create a diversified global LNG business.

Aramco’s third-quarter net profit plunged by 23 per cent, marginally beating analyst estimates, on lower crude oil prices and volumes sold. Net profit declined to $32.6bn for the quarter to September 30 from $42.4bn a year earlier.

Read: Saudi Aramco Q3 profit falls 23% on lower crude oil prices, volumes