DAMMAM, 19 May 2004 — Saudi Arabia, which has the largest oil reserves, dominates the world of oil supply. It is only now that it has started venturing into the natural gas field in a big way. It has recently signed agreements with three consortiums to explore gas in an area of 120,000 square kms.
Prior to these agreements, the Kingdom had already launched one of its mega project in Haradh. When Crown Prince Abdullah, deputy premier and Commander of the National Guard, inaugurated the Saudi Arabian Oil Company’s Haradh Natural Gas and Oil Development Project, a new chapter was opened in the gas sector which economic experts said was a true reflection of country’s march toward diversification — to a non-oil based economy.
The Haradh mega-project consists of a giant gas plant capable of delivering 1.5 billion standard cubic feet per day of sales gas to Saudi Arabia’s Master Gas System, and a state-of-the-art gas oil separation plant (GOSP) capable of stabilizing 300,000 barrels per day (bpd) of Arabian Light crude oil.
The GOSP associated with the Haradh Natural Gas and Oil Development Project — called GOSP-2 — also includes a 130 million standard cubic foot associated gas gathering facility. In addition to the sales gas, the Haradh Gas Plant is designed to deliver 170,000 bpd of high-value condensates to Saudi Aramco’s Abqaiq processing facility, and can produce 90 metric tons of sulfur per day for export.
The Petroleum and Mineral Resources Minister Ali Al-Naimi called the project one of the links to the Kingdom’s integrated economic policy: To optimize utilization of available natural resources, taking into consideration the Kingdom’s relative advantage of abundant, relatively cheap energy to propel the national industrialization and development drive, stimulate economic growth and avoid “exclusive dependence on crude oil exports.”
This expansion, according to experts, allows for the allocation of gas to several major petrochemical projects and massive industrial complexes that will be accomplished during the coming five years, with investments totaling SR75 billion. The giant project has already gained international recognition for being a pacesetter in the industry. Not only did the Haradh project use new engineering concepts and new technology for greater long-term efficiency, it was also completed ahead of schedule. Haradh project was just the beginning of a series of projects that were to follow in coming days. The output of natural gas has advanced fairly steadily during the past 10 years. According to statistics available at Saudi Aramco, it reached 5.5 billion cubic feet per day mark in 2002. Saudi Arabia’s proven gas reserves are estimated at 230 trillion cubic feet and out of that around two-thirds consist of associated gas, mainly from the onshore Ghawar field and the off shore Safaniyah and Zuluf fields.
The Ghawar field alone accounts for one-third of the country’s total natural gas reserves. The Master Gas System (MGS) that was completed in 1984 was feeding gas to the industrial cities of Yanbu and Jubail. The combined production of petrochemical of these two cities accounts for 10 percent of the world’s petrochemical output.
Considering an increase in domestic demand an investment of nearly SR17 billion was targeted for MGS expansion. In October 2002, construction was completed on a SR15 billion-gas processing plant at Hawiyah that could produce 1.4 billion cubic feet per day non-associated gas. Hawiyah represents the largest Saudi natural gas project, the first to process only non-associated gas from the deep Khuff and Jauf reservoirs. These were big leap in the gas sector, but it was still not going to fulfill the growing demand of energy in the country that was dependant on oil. And as a result Saudi Arabia invited more than 40 companies last year to bid on three onshore natural gas blocks in the south Ghawar area.
