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Saudi Aramco makes gas discovery in Read Sea

Saudi Aramco chases natural gas onshore and offshore

Saudi Arabia consumes 3 million barrels per day of crude oil for domestic consumption that could be substituted by natural gas.

In the same time, Saudi Arabia holds 282.6 trillion scf of natural gas.reserves, ranking in the fourth position in the world. 

When Saudi Aramco decided to convert its naphtha crackers into mixed crackers to accept natural gas. supply as feedstock instead of conventional crude oil, that gave the signal that Saudi Arabia has integrated that crude oil prices and natural gas markets will be decoupled for a long period of time.

Saudi Arabia assumes fully its leading role to stabilize the crude oil market, as today around $100 per barrel, in the other way.

This position requires Saudi Arabia to maintain its reserves and increase capacities of crude oil to align production on market demand whenever needed.

The drawback of this strategy is that all the economy in Saudi Arabia is therefore exposed to the fluctuations of the global oil market.

In this context, the Kingdom is cautious to secure its own development regardless of the oil market in increasing its local added value and creating jobs for its young generation.

The natural gas. is identified as the key of the solution since it is now cheap, available and easy to use for the downstream industry to develop endless petrochemical chain of products for the local market and export.

This transformation activities being made in Saudi Arabia will also contribute to improve the Saudi trading balance which may turn negative in 2015 if the domestic consumption and related imports continue to rise faster than crude oil export revenues.

The exploration of non-associated natural gas started in Saudi Arabia in the years 2000s with the offshore development of Karan field in 2006 to supply the Khursaniyah gas power plant just running into operations in 2012.

Then came the discoveries of the Habshan and Arabiyah offshore gas fields in the Arabic-Persian Gulf at the northeast of Dharan.

In 2011, Saudi Arabia experimented a one-day production to reach its ever high level of 11.2 billion of standard cubic feet per day (scfd) of natural gas.

But for 2014, Saudi Arabia is targeting 40% increase with 4.5 billion scfd  gas production on yearly basis.

Saudi Aramco makes gas find close to Port of Duba

After 2D and 3D surveys performed in 2009 in the Red Sea, Saudi Aramco signed contracts to intensify the exploration with several offshore services companies:

 – Shoaibi Group from Saudi Arabia

 – ARKeX from UK

 – Electromagnetic GeoServices (EMGS) from Norway. 

On the west side of the Red Sea, Egypt explored successfully its territorial waters along its eastern coast and so far discovered 8 billion barrels of proven reserves.

On the Saudi side, Saudi Aramco made a  gas find 26 kilometers northwest of the port of Duba.

From the test well performed by Saudi Aramco, the natural gas. was measured to flow at 10 million cf/d at 5,900 meter total depth.

From these first results, Saudi Aramco will proceed to other discovery wells to evaluate the amount of reserves of that discovery.

All together for the exploration and production of the oil and  gas in the Red Sea, Saudi Aramco is planning $25 billion capital expenditure.

In addition to this large offshore campaign, Saudi Aramco is also considering to explore and develop its shale gas onshore.

Even if still expensive to produce in Saudi Arabia, Saudi Aramco is willing to learn and take the benefits from the  shale gas experiences made in USA. 

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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