Saudi Arabia says ‘large quantities’ of natural gas found in Red Sea: Gazette
Dubai — Saudi Arabia says “large quantities” of natural gas have been found in the Red Sea, semi-official Saudi Gazette newspaper reported, citing the country’s energy minister Khalid al-Falih. The amounts were not specified.
Aramco is intensifying prospecting operations in the next two years, and is moving toward investment in liquefied gas before owning gas projects overseas, the minister said, according to the report. Aramco will be one of the biggest five LNG producers in the world in 15 years, and “we will start trade in gas before entering into ownership and production,” he said.
In contrast to gas, the Gazette reported that estimated Red Sea oil reserves are low, and Falih expects production costs to be high.
Saudi Arabia is OPEC’s largest oil producer, with the latest Platts OPEC survey estimating production at 10.15 million b/d in February. But Falih has recently been emphatic about the Kingdom focusing more on gas investments, both at home and abroad.
The CEO of Saudi Arabia’s state-owned Aramco oil company, Amin Nasser, said last month that the country could be exporting around 3 Bcf/d of gas before 2030, including both pipeline and LNG exports.
The Kingdom recently revised upwards its estimated gas reserves, following an independent audit. Aramco reported gas reserves of around 319.5 Tcf by the end of 2017, up from 302.3 Tcf previously estimated.
Aramco last year entered into preliminary discussions with the UAE and Russia related to gas. The potential new alliances come as Aramco aims to take on a more active position in the overseas gas market. The country is also aiming to increase its share of gas-fired power generation and shift away from using power generated by fuel oil.
Saudi Arabia’s natural gas production has been struggling to keep pace with surging demand from the power generation sector, industrial development and expanding economic activity.
In the Gazette report, Falih was quoted saying that Aramco has opportunities to own a number of projects, including Yamal 2 in the North Pole of Russia, in the US and Australia.