Saudi Aramco, officially known as the Saudi Arabian Oil Company, is a state-owned oil company of Saudi Arabia and a fully integrated, global petroleum and chemicals enterprise. It recently announced a series of engineering, procurement, and construction (EPC) contracts worth $7.7 billion to various companies, including Samsung Engineering.
In a significant move towards expanding its gas production capacity, this investment is directed towards an expansion of the Fadhili Gas Plant. Aramco has earmarked this plant as a key component of its strategy to increase its gas output by more than 60% from 2021 to 2030.
Contract Details and Project Aims
Samsung Engineering, GS Engineering & Construction, and Nesma & Partners are the three beneficiaries of this contract. The goal of the contracts is to boost the plant’s processing capacity from the current 2.5 billion standard cubic feet per day (bscfd) or (70.8 mcm) to 4 (bscfd) or (113.3 mcm), an increase of 62.5%.
Natural gas is also a cleaner-burning fuel compared to coal or oil. The project also aims to reduce greenhouse gas emissions through the latest in high-efficiency equipment and processes. Therefore, Aramco is also billing this development as a major leap forward in regard to its commitment to environmental sustainability and developing a lower-carbon hydrogen business.
Environmental and Economic Implications
The expansion of the Fadhili Gas Plant will significantly alter Saudi Arabia’s domestic energy consumption by increasing natural gas availability. Reducing the country’s reliance on crude oil will free up more oil for export, potentially increasing national revenue.
The Fadhili Gas Plant is the first in the world to treat nonassociated gas from both onshore and offshore fields. It’s also the first Aramco plant to use Tail Gas Treatment technology, enabling sulfur recovery rates of more than 99.9%.
The project is also expected to increase sulfur production by 2,400 metric tonnes daily. This should result in a significant additional stream of income from what is essentially a by-product of the primary process.
According to Wail Al Jaafari, Aramco’s executive vice president of technical services, “The expansion supports our ambitions to develop a lower-carbon hydrogen business, while associated liquids from gas are an important feedstock for the petrochemical industry.”
Summary
Aramco’s $7.7 billion investment in the Fadhili Gas Plant is not only a major statement of intent for the oil company but could also be a boon for the entire Saudi economy. As a bonus, the project aims to help both the company and the kingdom progress towards their sustainability and environmental goals.
It’s a move that solidifies Aramco’s positioning as one of the leaders in the regional and global energy landscape. And, along with posting its second-highest net income of $121.3 billion in 2023, the company’s future looks more secure than ever.
