By tapping into unconventional gas, Saudi Arabia stands to displace up to 350,000 b/d of crude burn by 2030. The increased gas supply would not only curb domestic crude use but also free up more oil and refined products for export, strengthening the country’s position in global energy markets, according to Rystad.

The Jafurah project is part of Saudi Arabia’s ‘Vision 2030’, which seeks to boost gas production by 60% from 2021 levels while diversifying the nation’s energy mix. Planned to unfold in three phases, the project will see more than $100bn in investment in the next decade, positioning Saudi Arabia as the world’s third-largest shale gas producer. Utilising more efficient natural gas and renewable energy in power generation will also enable Saudi Arabia to reduce its dependence on crude oil.

Located near state-owned Aramco’s Uthmaniyah gas-processing plant some 400 km west of capital city Riyadh, Jafurah ‘benefits from logistical efficiencies as its proximity reduces the need for costly long-distance pipelines’, notes Rystad. ‘Uthmaniyah’s established infrastructure and expertise will be crucial in processing Jafurah’s output, including the separation of natural gas liquids, ethane, condensate and other byproducts, optimising the field’s commercial value,’ it adds.

Saudi Arabia is stepping up investment in natural gas as a cleaner, lower-carbon alternative to oil and coal. This strategic pivot, alongside the OPEC+ decision to cap Aramco’s oil production at 12mn b/d by 2027, is designed to support price stability while increasing domestic gas consumption. Output is projected to climb to 13bn cf/d by 2030, setting the stage for a major expansion in gas supply. ‘This will allow the nation to redirect more crude for export, reinforcing its influence in the global energy landscape,’ comments Rystad.  

As the Jafurah gas field approaches maturity, it is expected to offset crude burn by 35,000 b/d in 2025, gradually increasing to 350,000 barrels by 2030, displacing volumes that would otherwise be used in power generation. ‘This shift comes at a critical time, as oil product demand in Saudi Arabia is projected to rise by approximately 100,000 b/d between now and 2030, largely driven by increasing consumption of gasoline and diesel,’ notes Rystad. ‘However, domestic demand is not expected to be the key driver of Saudi crude growth in the coming years. Instead, the Kingdom will likely pivot toward maximising crude and refined product exports,’ it continues.

Although switching away from crude offers emissions benefits, that does not appear to be the primary driver, according to Rystad. Instead, the economics of fuel switching favour gas over crude for domestic power generation. Domestic natural gas is priced at roughly $2–2.5/mn Btu and Arab Light crude currently trades at above $70/b [which is equivalent to $12.6/mn Btu based on a conversion rate of 1 barrel=1.57mn Btu], according to the market analyst. Because of these favourable economics, gas-fired plants – especially high-efficiency combined-cycle units – can now operate at up to 60% efficiency, compared to around 30% for crude-fired systems. ‘This results in operational costs that are six to eight times lower per kilowatt-hour,’ says Rystad. ‘These cost advantages underpin Saudi Arabia’s strategy to replace crude with gas in its power mix, enabling the Kingdom to redirect more crude toward export markets and strengthen fiscal returns.’

BP completes loading of first LNG cargo from GTA project

In other gas news, BP recently loaded the first cargo of LNG for export from its Greater Tortue Ahmeyim (GTA) Phase 1 project offshore Mauritania and Senegal, West Africa.  

GTA is being developed in partnership with Kosmos Energy, Petrosen and SMH. It is the third upstream major project start-up of the year for BP. A further seven are expected by the end of 2027, in line with BP’s strategy of growing its upstream oil and gas business.

GTA is one of the deepest offshore developments in Africa, with gas resources in water depths of up to 2,850 metres. It has been declared ‘a project of strategic national importance’ by the governments of Mauritania and Senegal. Once fully commissioned, GTA Phase 1 is expected to produce around 2.4mn t/y of LNG.

‘This first cargo from Mauritania and Senegal marks a significant new supply for global energy markets,’ comments Gordon Birrell, BP Executive Vice President Production & Operations, ‘[and marks] the creation of a new production hub within our global portfolio.’ 

Loading of first cargo from GTA LNG field offshore Mauritania and Senegal

Photo: BP