Aramco announces $25bn in contracts to boost gas expansion in Saudi Arabia

Aramco, Saudi Arabia’s state-owned oil company, has unveiled a substantial investment of over $25 billion to significantly enhance its gas operations, with aims to boost sales gas production by over 60% by 2030 compared to 2021.

The newly announced investments are earmarked for the second phase of the Jafurah unconventional gas field development, the third phase of expanding Aramco’s Master Gas System, along with the addition of new gas rigs and continued capacity maintenance. In a series of major commitments, Aramco has awarded 16 contracts worth approximately $12.4 billion for the Jafurah field’s phase two. This phase involves constructing gas compression facilities, pipelines, and expanding the gas plant with additional processing trains, utilities, and sulfur and export facilities.

Further enhancing its infrastructure, Aramco plans to establish new natural gas liquids (NGL) fractionation facilities in Jubail. This project, named Riyas, will include fractionation trains, utilities, storage, and export facilities, primarily processing NGL from the Jafurah gas plant.

The third phase of the Master Gas System’s expansion is another critical component, with Aramco issuing 15 lump sum turnkey contracts valued at $8.8 billion. This phase is set to augment the network’s capacity by 3.15 billion standard cubic feet per day by 2028, involving about 4,000km of pipeline installation and the addition of 17 new gas compression trains.

Aramco’s president and CEO, Amin Nasser, emphasized the strategic importance of these investments, stating, “These contract awards demonstrate our firm belief in the future of gas as an important energy source, as well as a vital feedstock for downstream industries.” He highlighted the dual benefits of diversifying Aramco’s energy portfolio and supporting Saudi Arabia’s transition to a lower-emission power grid.

The Jafurah gas field is poised to play a pivotal role in Aramco’s strategy, with reserves estimated at 229 trillion standard cubic feet of gas and 75 billion barrels of condensate. The field’s development, expected to see over $100 billion in lifecycle investment, will commence production in the third quarter of 2025, aiming for a sustainable gas production rate of two billion standard cubic feet per day by 2030.

The Master Gas System, which has been operational since 1982, serves as a backbone for transporting gas across the Kingdom, significantly reducing gas flaring and contributing to one of the lowest upstream carbon intensities in the industry.

Aramco’s aggressive expansion in gas infrastructure reflects a strategic pivot towards sustainable energy solutions that align with global shifts away from oil-based power generation. This move not only ensures energy security for Saudi Arabia but also positions Aramco as a leader in the global transition to greener energy sources.