The Saudi Prince Abdulaziz bin Salman announced over the weekend that the development of the field over 22 years would provide the government with an annual net income of $8.6 billion and contribute $20 billion to the kingdom’s gross domestic product per year. A week earlier he promised Saudi Arabia would “soon” be able to become a natural gas and a petrochemical exporter.
Production to be fully ramped up by 2036
Al-Jafurah, the kingdom’s largest non-associated gas field, is estimated to contain 200 trillion cubic feet of rich raw gas, or wet gas, which would provide ample feedstock for the Saudi petrochemical industry, domestic power generation and exports. Targeted to start production in 2024, the output of the field is meant to be ramped up to approximately 2.2 billion standard cubic feet per day of sales gas by 2036.
Ultimately, Aramco expects the field to produce some 550 thousand barrels per day of gas, both liquid and condensate. In addition, there will be an output of some 425 million standard cubic feet per day of ethane, equaling about 40 percent of production.
The state-run Aramco has been heavily investing in gas exploration lately. More rigs have been drilled for natural gas than for oil for the first time in seven years, in line with so-called ‘localisation efforts’. Saudi Aramco has set a production target of 23 billion cubic feet a day (bcf/d) of gas by 2030, up from currently around 14 bcf/d, and the energy giant has undertaken key projects to boost output from conventional gas fields.
Aspiring to end oil-fired generation
Striving for a more sustainable power sector, the Saudi Kingdom wants to generate 70 percent of its electricity from gas and 30 percent from renewable energy sources, the Saudi energy minister, Prince Abdul Aziz bin Salman said. Simultaneously, strives to use domestic gas as a feedstock for its larges petrochemicals industry. Any excess gas production will be exported.
Saudi Arabia is one of a handful of countries that burn crude oil directly for power generation. Normally, countries avoid burning expensive oil and turn to gas or coal for power generation. However, Saudi Arabia has no domestic coal production, and most of its natural gas is associated gas, which is produced along with oil from the same wellbore.
By 2030, the Saudis’ electricity demand is seen to more than double, and by then up to 60 percent of the ageing oil-fired capacity is meant to be replaced by gas generation: This ambitious plan requires an investment of up to $18 billion.