Saudis stake $110B on Jafurah unconventional gas field

(Bloomberg) --Saudi Arabia plans to invest 412 billion riyals ($110 billion) to develop unconventional natural gas reserves in the eastern Jafurah field, according to the kingdom’s official Saudi Press Agency.

Crown Prince Mohammed bin Salman presided over a meeting of the Saudi High Commission for Hydrocarbons on Thursday during which the development plans were reviewed, the agency reported late Friday. The field is estimated to hold 200 trillion cubic feet of wet gas (about 5.7 trillion cubic meters) and its phased development is expected to begin production in 2024, gradually increasing output to 2.2 billion cubic feet per day by 2036, it added.

Saudi Arabian Oil Co. Chief Executive Officer Amin Nasser said in a separate statement on Saturday that the development of the Jafurah field is meant to support the state-run company’s “diverse resources and the kingdom’s economic development.”

Jafurah will be able to produce about 130,000 barrels a day of ethane, representing about 40% of the kingdom’s current production and about 500,000 barrels a day of gas liquids and condensates, representing about 34% of the country’s output.

Development of the field over 22 years would provide the government a net income of about 32 billion riyals annually and contribute 75 billion riyals annually to the kingdom’s gross domestic product, the agency said.

Aramco, as the state-run company is known, is expanding its search for gas as a potential export to help reduce the nation’s reliance on sales of crude. Saudi Arabia also wants to use gas at home as fuel in power stations and as feedstock for the production of petrochemicals, a high-priority industry for the government in its strategy to diversify the economy.

Jafurah is located between Ghawar, the world’s largest oil field, and the Gulf, near the hub of the Saudi energy industry.