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Saudi Aramco considers again LNG Import Terminal project

Saudi Arabia to work on Red Sea LNG Terminal Project

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolThe national oil company Saudi Aramco is considering again to build liquefied natural gas (LNG) import terminal on the Red Sea.

In the previous years, the Kingdom of Saudi Arabia has already pushed and shelved this Red Sea LNG import terminal project.

This stop-and-go attitude was justified by the uncertainty on the natural gas market prices and the question mark on the time frame for Saudi Arabia to develop its unconventional resources of shale gas.

Even if the latest estimations are giving now to Saudi Arabia the fifth world largest reserves of shale gas with 645 trillion cubic feet, the geologic structure where they lies is far different from USA, thus they should take longer time to be developed.

Saudi-Aramco_Red-Sea_LNG_Import_Terminal_mapIn parallel Saudi Aramco took the spearhead role of Saudi Arabia strategy to invest downstream in the petrochemical sector in order to reduce its reliance on the export of crude oil, increase the added value produced in the Kingdom and create thousands jobs to the young generation.

Even if Saudi Arabia is currently investing heavily to double its natural gas production from 9.9 million cubic feet per day (cf/d) in 2012 to 15 million cf/d in 2017, its consumption of natural gas is increasing by 5% year per year not including the substitution of the crude oil burnt in the power plants.

On its own, the Saudi Aramco Wasit Gas Project should add 2.5 million cf/d of natural gas production to the Kingdom by 2017.

Another challenge is that most of the natural gas produced in Saudi Arabia contents a high percentage of sulfur which increase the costs and complexity of all the projects especially when offshore.

Saudi Aramco evaluates Jeddah and Yanbu locations

In this context, to provide the gas supply to the fast growing petrochemical industry and to the electrical power generation in substitution from crude oil appears more and more as a challenge if Saudi Arabia has to count only on its domestic production in the meantime that all the conventional and unconventional gas development projects come on steam.

All these challenges motivate Saudi Aramco to reactivate the LNG import terminal project.

Saudi-Aramco_Red-Sea_LNG_Import_Terminal_ProjectWith capital expenditure estimated around $200 million for a Red Sea LNG Import Terminal project, Saudi Aramco could give to Saudi Arabia the flexibility to develop its own natural gas resources at its own pace.

Currently Saudi Aramco is proceeding to the feasibility study of this Red Sea LNG Import Terminal.

Different locations are actually evaluated such as Jeddah and Yanbu.

This Saudi Aramco LNG terminal project would come on the Red Sea in parallel to the Jordan LNG import terminal to be built in the Port of Aqaba

Planned to be developed on fast-track in the meantime that other giant gas field projects come on stream, the Saudi Aramco is targeting the LNG import terminal to be completed by 2015.

But these last months confirmed the overall trend resulting from the US shale gas glut that the natural gas prices should remain around the actual levels in the USA and continue to come down in the rest of the world.

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2 Comments to “Saudi Aramco considers again LNG Import Terminal project”

  1. omnis-ellas Member of NGVA (www.ngvaeurope.eu), architect of energy security Projects aims in implementing in the Kingdom of Saudi Arabia, GasMed’s 3-Projects Investment Plan in view of LEVERAGING LNG consumption for fueling CONVERTED vessels’ & vehicles’ Diesel electronically fueled injection engines in consuming LNG replacing polluting & expensive Diesel MDO.
    GasMed creates LNG DEMAND by converting vessels’ & vehicles engines in consuming LNG satisfied by LNG SUPPLY provided by GasMed’s LNG marine & land bunkering infrastructure, offering a ROI of five years.
    Ideal sites for Saudy GasMed’s establishment are the Ports of Dammam or the Port of Jeddah, where the NEW LNG terminal shall be constructed.

  2. Above text is correct & endorsed by Yannis Kompopoulos Founder, President & CEO of omnis-ellas SA.

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