Japan’s JGS to develop shale facilities for Saudi Aramco

Saudi Arabia flag
Source: DollarPhotoClub

Japanese JGC Corporation will build shale gas facilities, including processing facilities, wellheads and pipelines for gas, in Turaif, Saudi Arabia. Known as System A, and reportedly worth close to $200 million, the project is to be located nearby Waad al-Shamal  – a big mining project that is currently under development.

The mining project and a power plant for Saudi mining company Ma’aden is projected to take 200 million cubic feet per day of unconventional gas by 2018 from the projects.

Saudi Arabia is working towards increasing its natural gas output in the face of rapidly rising domestic demand for power. Exploring unconventional resources – located in the country’s northwest, Eastern Province and Empty Quarter – is one way to satisfy the demand and the Kingdom seems inspired by the success of the U.S. and it’s ‘shale revolution’.

The country has set optimistic targets for exploration, expecting to pump 20 to 50 million cubic feet of gas per day in 2016, ramping to 500 million cubic feet per day by 2018 with an end target of 4 billion cubic feet per day by 2025.

According to Reuters, the award of the System A contract was originally due to happen by end November 2014 with a targeted completion in December 2016 before the bidding process was extended several times.

Capacity of the gas gathering facility increased to 66 million scfd (standard cubic feet per day) from 50 million scfd when Aramco originally tendered the project.

Four companies are bidding for another unconventional gas project, an expansion of the System A and known as System B. The project is four times as big as System A.

The Kingdom’s oil and gas producing giant Saudi Aramco declined to comment on the news.

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