Saudi Arabia's largest unconventional gas field development project is set to attract two major investors. According to a Bloomberg report on May 2, Saudi Aramco, Sinopec, and TotalEnergies are in discussions to invest in the Jafurah development project in Saudi Arabia. The negotiations include the construction of facilities for exporting liquified natural gas (LNG).
Citing sources familiar with the matter, the report states that Saudi Aramco is seeking to raise about $10 billion (approximately ¥691 billion) in total for the project. The negotiations are still ongoing, and a final decision has not been made.
In response to inquiries on the matter, Sinopec declined to comment, and TotalEnergies had not responded by the time of publication.
Sinopec is one of China's "big three" oil companies, the largest supplier of refined oil and petrochemical products, and the second-largest oil and gas producer in China. TotalEnergies is headquartered in Paris, France, and is one of the world's leading energy giants.
In 2020, Saudi Aramco proposed the development of the Jafurah gas field; in 2021, the company officially obtained development permission. At the end of last year, Saudi Aramco sought equity investors for the project.
The development of the Jafurah gas field signals Saudi Arabia's accelerated shift from an oil-based energy economy to natural gas. The Saudi government aims to stop using oil for power generation by 2030, with natural gas providing more than half of the national power grid. The natural gas from the Jafurah field will be primarily used for domestic industries such as power, petrochemicals, and blue hydrogen.
The Jafurah gas field is located southeast of the world's largest oil field, Ghawar, near the Persian Gulf, covering an area of approximately 17,000 square kilometers. It is Saudi Arabia's largest unconventional gas field, with natural gas reserves of about 200 trillion cubic feet (equivalent to 5.66 trillion cubic meters).
According to Saudi plans, a total of SAR 412 billion ($110 billion) will be invested in the phased development of Jafurah, with the earliest expected production start in early 2024. By 2036, the gas field's natural gas output is projected to increase to 22 billion cubic feet per day, with daily production of 425 million cubic feet of ethane and 550,000 barrels of natural gas liquids and condensates.
A report by S&P Global Platts indicates that the Jafurah gas field could help Saudi Arabia reduce its daily crude oil consumption for power generation by 688,000 barrels.
According to Saudi Arabia's Arab News, Saudi Arabia ranks among the top five in the world for unconventional natural gas reserves, and the launch of the Jafurah project could propel the country into the ranks of major shale gas producers within three years.
BP Energy Statistics 2022 shows that as of 2020, Saudi Arabia had proven oil reserves of 297.5 billion barrels, accounting for 17% of the world's reserves, ranking third globally. The country had proven natural gas reserves of 6 trillion cubic meters, accounting for 3.2% of the world's reserves, ranking eighth.
As of 2021, Saudi Arabia's daily natural gas production was 117.287 billion cubic meters, accounting for 2.9% of global production.
In 2022, Saudi Aramco reported a net profit of $161.1 billion, a 46.5% increase year-over-year, marking the highest level since the company's initial public offering
