Saudi Arabia plans to use its $110 billion Jafurah unconventional gas development as a flagship project for producing blue hydrogen, underpinning state-owned Saudi Aramco's plans to become a low carbon producer, on a huge scale.

Energy Minister Abdulaziz bin Salman said during the Saudi Green Initiative Forum in Riyadh on Sunday that the nation has “a terrific gas base in Jafurah” and plans to use a large portion of that gas to generate blue hydrogen, Bloomberg reported.

Prince Abdulaziz claimed that Saudi Arabia is one of the “biggest adventurers when it comes to blue hydrogen”, pointing to plans to produce and export about 4 million tonnes of hydrogen by 2030.

However, responding to an Upstream query, Saudi Aramco declined to comment on its Hydrogen production plans from the Jafurah project.

Net-zero ambitions

Saudi Crown Prince Mohammed Bin Salman has promised a "circular economy" approach to reach the kingdom's net-zero target by 2060, consistent with wider development and diversification plans for the Saudi economy.

The Saudi de facto ruler said the first package of measures launched to help develop the green economy would involve more than 700 billion riyals ($187 billion) worth of investments, in line with the nation’s declared 2030 Vision.

Saudi Aramco recently became the first big national oil company in the region to come up with a 2050 net-zero ambition.

The company recently said it aims to achieve net-zero Scope 1 and 2 greenhouse gas emissions across its wholly-owned operated assets by 2050.

Aramco, which is also expanding its oil and gas production capacity in its bid to maintain the global market share said it plans to disclose further details on its net-zero goals in its forthcoming sustainability report, to be issued in the second quarter of 2022.

Energy Minister Prince Abdulaziz described the nation's goal as "to reach net zero carbon emissions by 2060, taking into account that this will not have an adverse financial or economic impact on oil exports.”

He said Saudi Arabia is making significant efforts to scale up the “share of gas and renewable energy in its own energy mix to 50% for each of them by 2030.”

$110 billion development

The Saudi government last year approved the giant Jafurah development, with overall investments set to reach $110 billion.

In its initial phase, the gas terminal is expected to process up to 1.1 billion cubic feet per day of unconventional raw gas from nearby areas, producing sales gas, ethane, natural gas liquids and condensate.

At least five EPC packages are said to be on offer by Aramco, Upstream understands.

Considering the huge potential of the Jafurah field, Saudi Arabia now plans to tap these vast reserves for scaling up the production of blue hydrogen.

Aramco has said it expects Jafurah production to begin in early 2024, reaching 2.2 Bcfd of sales gas by 2036.

In addition, it is expected to produce about 550,000 bpd of NGLs and condensate.

Aramco said that the field, which holds estimated reserves of 200 trillion cubic feet of gas, will also help meet Saudi Arabia's needs for cleaner-burning energy.

Crown Prince Mohammad bin Salman said last year: “The development of the field would earn, within 22 years from the beginning of its development, a net income for the government of about $8.6 billion and provide the gross domestic product of an estimated $20 billion annually."

The Jafurah field spans a length of 170 kilometres and a width of 100 kilometres and is located between Ghawar, the world’s largest conventional onshore oilfield, and the Persian Gulf coast.

(This article was updated on 29 October to reflect Saudi Aramco's response on the Jafurah project))