Saudi Aramco has awarded multiple contracts worth $10 billion for its giant Jafurah unconventional gas development, where it aims to produce 2 billion cubic feet per day of gas by 2030.
The state-controlled giant described awards of “16 subsurface and engineering, procurement and construction contracts valued at $10 billion for the Jafurah gas plant and gas compression facilities, as well as infrastructure and related surface facilities”.
The contracts, awarded on Monday, follow a recent report by Upstream describing a clutch of leading international EPC players as the front runners for multiple packages.
Aramco said the “contracts were awarded to domestic and international service companies and involve several projects to enable the development of subsurface and surface components of the Jafurah programme”.
However, the company did not reveal the companies that have landed the prizes.
The vast Jafurah site is thought to be the largest known free gas field in the kingdom and a key component of Aramco’s strategy to ramp up unconventional gas output, in line with its energy-transition plans.
The company had recently announced its ambition to achieve net-zero greenhouse gas emissions on a Scope 1 and Scope 2 basis across its wholly owned operated assets by 2050.
Aramco said that capital expenditure at Jafurah is expected to reach $68 billion over the first 10 years of development.
However, the company expects more than $100 billion total overall lifecycle investment at Jafurah.
Production is expected to reach up to 2 Bcfd of sales gas, 418 million cubic feet per day of ethane and about 630,000 barrels per day of gas liquids and condensates by 2030, Aramco noted.
Aramco said the Jafurah contract awards mark a “significant milestone both for the commercialisation of unconventional resources in Saudi Arabia and the expansion of Aramco’s integrated gas portfolio”.
The company said Jafurah will “provide additional feedstock to support the growth of the company’s high-value chemicals business, complement its focus on low-carbon hydrogen production and help reduce emissions in the domestic power sector.”
Saudi Arabia’s Energy Minister Abdulaziz bin Salman al Saud said recently that the country plans to tap into its giant Jafurah gas reserves for producing hydrogen, but he did not provide further details.
Aramco chief executive Amin Nasser said the awards are a “pivotal moment in the commercialisation of Saudi Arabia’s vast unconventional resources programme”.
“Gas has a critical role to play in the energy transition and it will help significantly reduce emissions in the domestic energy sector while providing a feedstock for low-carbon hydrogen and ammonia,” he said.
Five crucial contracts
While Aramco has awarded up to 16 EPC and subsurface contracts for Jafurah, Upstream understands that a quintet of jobs together involve the most crucial facilities meant for the gas project.
India’s L&T is believed to have landed a package that comprises at least three gas compression facilities.
The facilities are likely to jointly produce up to 600 MMcfd of gas plus 150,000 bpd of condensate and natural gas liquids systems.
L&T is also expected to have landed a package that includes export pipelines meant for the unconventional project.
Samsung Engineering is said to have secured the package that includes gas processing facilities with two trains, each handling about 550 MMcfd of raw gas.
A grouping of Hyundai Engineering and Hyundai E&C is Aramco’s preferred contractor for a package that comprises utilities and sulphur-recovery facilities.
Saipem is the preferred contractor for a fourth package that comprises work on upstream pipelines and tie-in.
In addition, several other awards include “construction of the Jafurah bulk supply point, transmission lines, power interconnection for Jafurah Gas Plant and new cogeneration plant facilities".
Those winners could not yet be individually confirmed by Upstream.
With an estimated 200 trillion standard cubic feet of gas in place, the Jafurah basin hosts the largest liquid-rich shale gas play in the Middle East, Aramco said.
Crown Prince Mohammad bin Salman last year said: “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 gross domestic product with an estimated $20 billion annually."
The Jafurah field is spread across a length of 170 kilometres and a width of 100 kilometres between Ghawar — the world’s largest conventional onshore oilfield — and the Saudi coast.