Saudi Aramco awards $25 billion in contracts to expand gas production

Saudi Aramco awarded $25 billion of contracts to expand its natural gas production in line with Saudi Arabia's ambitions to have the supplies needed to meet anticipated rising demand.

Sixteen contracts totaling $12.4 billion have been awarded for phase two development of the Jafurah unconventional gas field, which contains an estimated 229 Tcf of raw gas and 75 billion stock tank barrels of condensate, Aramco said in a June 30 statement. Another 15 contracts for $8.8 billion were awarded to begin the phase three expansion of Aramco's master gas system, which distributes gas to customers across Saudi Arabia. Also, 23 gas rig contracts for $2.4 billion were awarded, along with two directional drilling contracts totaling $612 million. Lastly, 13 well tie-in contracts at Jafurah for $1.63 billion were awarded between December 2022 and May 2024. Aramco did not say which companies got the awards.

"These contract awards demonstrate our firm belief in the future of gas as an important energy source, as well as a vital feedstock for downstream industries," Aramco CEO Amin Nasser said in the statement.

The projects aim to increase the company's gas production and add "significant" volumes of ethane, NGL and condensate, the company said. The expansion will raise the company's capacity by 3.15 Bcf/d by 2028 and 4,000 km of pipelines will be installed, as well as 17 gas compression trains.

The Jafurah project is expected to start up in the third quarter of 2025, with total investment in the field at more than $100 billion and sales of 2 Bcf/d by 2030. Aramco is targeting at least a 60% increase in sales by 2030, from a 2021 base.

The contracts awarded cover construction of gas compression facilities and associated pipelines, expansion of the Jafurah gas plant including construction of gas processing trains, and utilities, sulfur and export facilities, Aramco said.

They will also involve construction of Aramco's new Riyas natural gas liquids fractionation facilities in Jubail, including NGL fractionation trains, and utilities, storage and export facilities to process NGL received from Jafurah.