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Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

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Aramco Targets 60% Increase in Gas Production by 2030

  • Saudi Aramco plans to increase its natural gas production by 60% by 2030, investing heavily in LNG projects and the expansion of its Jafurah gas field.
  • The company's CEO calls for increased international investment in oil and gas, despite the IEA's predictions of waning demand.
  • Aramco's continued focus on fossil fuels contrasts with the global green transition and the trend among many other companies to diversify their energy portfolios.

The Saudi state-owned oil major Aramco has big plans for its future in fossil fuels, despite calls for a global green transition. The oil and gas firm is investing heavily in a future in LNG, solidifying its position in the international market as demand continues to grow. This year, it has announced several big LNG investments, in line with the company’s development plan. In addition, Aramco’s CEO Amin Nasser has been very vocal in his support for greater international investment in oil and gas, suggesting that demand will remain high for years to come, despite International Energy Agency (IEA) projections that demand will wane from 2030. 

Last year, Aramco announced aims to boost its oil production from 12 million bpd to 13 million bpd by 2027, investing a projected $40 billion between 2024 and 2028. However, earlier this year, it announced that it no longer planned to increase its crude output so much, shifting its focus instead to natural gas. The change in plans means that some oil projects will be canceled, including the Safaniya and Manifa increment programs. 

It appears to be going all in when it comes to natural gas. Last September, Aramco purchased a minority stake in MidOcean Energy for $500 million, marking its first foray into the international LNG market. Nasser stated, “For MidOcean, we're going through the process of getting the right approvals.” He added, “We are interested also in the U.S. We are in discussion with a number of companies and partners in the US and other parts of the world because that's a growth market. Very significant. We're looking at it for growth opportunity to expand our position in LNG.” Aramco has increased its gas production target to over 60 percent by 2030, based on a 2021 baseline. 

In June, Aramco signed contracts valued at over $25 billion. Around $12.4 billion will be dedicated to the second phase of expansion of its Jafurah gas field and $8.8 billion will go towards the third phase of expansion of its main gas network. It has also awarded 23 gas rig contracts, valued at $2.4 billion, alongside two directional drilling contracts for $612 million, and 13 well tie-in contracts at Jafurah, worth $1/63 billion. This reflects the company’s plans to develop Saudi’s unconventional gas reserves, using advanced extraction methods. 

Jafurah is the biggest unconventional non-oil associated gas field in Saudi Arabia and could well be the largest shale gas operation outside of the U.S., with reserves of 229 trillion cubic feet of gas and 75 billion barrels of condensates. Phase One of development at Jafurah commenced in 2021 and initial start-up is expected in late 2025. Aramco expects the total lifecycle investment in Jafurah to exceed $100 billion, achieving a projected output of two billion standard cubic feet per day by 2030, as well as large volumes of ethane, NGL and condensate.

Nasser stated, “By generating an anticipated 2 billion standard cubic feet per day of sales gas by 2030, this bold initiative will strengthen Saudi Arabia's position as one of the top national gas producers in the world”. Nasser also hopes the investment will diversify the company’s portfolio, enhancing its market position.

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The investment in Saudi’s main gas network will contribute to a 4,000km expansion of pipelines, which will increase capacity by approximately 3.2 billion standard cubic feet per day, as well as connect several new cities to the network. Several firms were awarded contracts under the investment including a Hyundai Engineering & Construction consortium and China’s Sinopec. 

Aramco’s major investment announcements come at a time when many other companies are reducing their oil and gas spending in favor of the diversification of their energy portfolios. The IEA recently stated that it expects a fall in demand growth and a surging supply of crude to leave global oil markets with a surplus this decade. A recent IEA report stated that global oil demand, including biofuels, averaged just over 102 million barrels per day in 2023, and predicted that demand will level off near 106 million barrels a day towards 2030. Meanwhile, due to the surge in global production following the pandemic, output is expected to surpass demand between now and the end of the decade, with the total oil supply likely to reach 114 million bpd by 2030. 

However, Nasser has repeatedly urged companies to increase their investment in oil and gas, suggesting that the IEA’s prediction is unfounded. Nasser recently stated, “In the real world, the current transition strategy is visibly failing on most fronts.” Nasser cited a KPMG report that showed that fossil fuels accounted for 82 percent of global consumption in 2023. He said, “This is hardly the future picture some have been painting," Nasser said, “All this strengthens the view that peak oil and gas is unlikely for some time to come, let alone 2030.” 

By Felicity Bradstock for Oilprice.com

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