Aramco starts construction for Midyan gas field

Dow Jones/Dubai

State-owned oil major Saudi Arabian Oil Co, or Saudi Aramco, said construction has started for its Midyan gas field in the kingdom’s northwest as part of its strategy to increase gas output to meet growing domestic demand.

The recent signing of the engineering, procurement and construction contract for the gas plant with the Saudi unit of India’s Larsen & Toubro Ltd marked the official start of the project, Aramco recently said in a statement on its website.

The Midyan gas plant, located about 195km west of Tabuk and 135km north of Duba, is expected to be fully operational by 2016, it said.

The field, which was discovered in 1992 and has significant gas reserves, is expected to produce 75mn standard cu ft a day of non-associated gas and 4,500 bpd of condensate.

Aramco also plans to build two pipelines stretching a length of 98km to deliver sales gas and stabilised hydrocarbon liquids to a power plant near Duba to generate electricity and to avoid burning high value diesel  

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 10.72bn cu ft a day in 2012 from 9.88bn cu ft a day in 2011, while gas reserves rose to 284.8tn standard cu ft from 282.6tn standard cu ft.