Commercial production of shale gas is expected in countries like Indonesia, Argentina, and China within the next five years. Saudi Arabia, which just started its search for unconventional gas within the last year, does not expect commercial production until at least 2020.
Saleh M. Saleh, chief explorationist, Unconventional Gas Exploration Division, Saudi Aramco, cited two reasons for Saudi Arabia’s new emphasis on unconventional gas. “Population growth is placing escalating demand on the utilities for power and water. The utilities need environmentally friendly gas. And unconventional gas development is manpower intensive, generating thousands of jobs.”
With the added need for feedstock for petrochemicals plants, Saudi Arabia is looking for ways to develop all of its resources. The country estimates that its unconventional gas resources could be five to 10 times as much as its conventional resources, he said.
Saudi Aramco divides its unconventional resources into two categories – shale gas and tight-sand reservoirs. The exploration will focus on three areas within the country.
“The first area is in the northwest part of Saudi Arabia,” Saleh told participants in the 2012 CWC Third World Shale Oil and Gas Conference, Sept. 21, in Houston. “There are shallower deposits in this area. This region is a government priority. The government’s plans include more jobs. The natural gas would replace diesel.”
The second area is South Ghawar. The Ghawar field is the largest oil field in Saudi Arabia. This area is a tight-gas sand opportunity, he noted. The area is close to infrastructure. There is a large amount of geological data available from the development of the oil field, which can be used to define the tight-gas sands.
The third area is in southern Saudi Arabia in the Rub Al-Khali. This would be shale. The source rock is primarily Jurassic and Cretaceous. “This is a potentially large condensate play,” Saleh added.
Saudi Aramco’s strategy includes building a specialized business model for unconventional resources. “Existing technology has to be modified to fit our needs. Cost is important,” he explained.
The company wants to localize services for the development and create a local supply value chain. “Without localization of the supply chain, we cannot have an unconventional program,” Saleh said.
Another important aspect of the strategy is to protect the aquifers.
Saudi Aramco is working with major service companies, including Schlumberger and Baker Hughes. The company is also training engineers in unconventional technology. “We have 54 young professionals in North America learning about the technology,” Saleh continued. “We know we cannot take all of the technology in North America to Saudi Arabia. But, we need to know the differences between conventional and unconventional procedures.”
Saudi Arabia recognizes its need to reduce or eliminate the burning of liquids in power generation and water desalination. Providing natural gas liquids and condensate for petrochemicals is also a priority.
“We recognize it is a cost and technology challenge. We are learning from our North American experience in Canada,” he said.
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