State oil giant Saudi Arabian Oil Co, or Aramco, plans to drill seven gas exploration wells in deep and shallow water in the Red Sea, off the coast of the northwestern city of Tabuk, the firm’s chief executive Khalid Al Falih said on Monday.
The province has given indications that it is full of hydrocarbon wealth, Mr Falih said, according to state-run Saudi Press Agency, or SPA. He did not, however, give a timeline for the exploration work. Aramco will also start gas production at its Midyan field in Tabuk, which was discovered in the 1980s, in 2013.
The field has significant reserves, and the gas will be used for power generation. Gas from Midyan will be transported by pipeline to a power plant in the coastal town of Duba, 135 kilometres southwest of the field. Aramco will drill more wells to appraise the field, which is forecast to produce 75 million cubic feet a day of gas and 4,500 barrels a day of condensate for a 20-year period.
Saudi Arabia, the world’s largest oil exporter, plans to greatly increase gas production to meet domestic energy demand and free up crude oil for export. However, the country hasn’t yet discovered non-associated natural gas in sufficient quantities to replace oil as the fuel for its planned electricity plants and guarantee cheap feedstock for new petrochemical factories.
Aramco is one of the largest oil and gas companies in the world, with activities in exploration, production, refining, distribution, shipping and marketing. The firm’s gas production averaged 9.9 billion cubic feet per day in 2011, up from 9.4 billion cubic feet per day in 2010, while gas reserves rose to 282.6 trillion standard cubic feet from 279 trillion standard cubic feet.