Saudi Aramco Makes Another Gas Find.

Saudi Minister of Petroleum and Mineral Resources Ali Al-Na'imi has announced: "Saudi Aramco has discovered a new gas field south of Ghawar field... On Nov. 15 gas from the Najimaan-1 well flowed at a rate of 30 million cubic feet daily" (30 MCF/day). The well is 30 km south of Ghawar and has an estimated production capacity that may exceed 60 MCF/day.

Saudi Arabia, the world's top oil exporter, has gas reserves of 242 TCF, making it the world's fifth largest holder of proven gas reserves. It faces increasing demand for natural gas from its rapidly growing population and new petrochemical and industrial projects. The kingdom plans to expand its gas exploration programme to add 50 TCF of non-associated gas reserves by 2016.

Petroleum ministry adviser Prince Faisal ibn Turki ibn Abdul-Aziz recently told an energy forum in Dammam: "We are embarking on a major exploration programme [for natural gas] across the kingdom... This will come out with a massive amount of data that will be very important for us to learn what the potential is, what needs to be done and when". Officials said the areas included the Nafud Basin, northern Saudi Arabia, Rub' al Khali (the Empty Quarter), the Red Sea and the Persian Gulf. Prince Faisal said on the sidelines of the forum: "Whether we have another offering will be determined by the information".

Saudi Arabia opened its gas fields to international firms to meet rising demand for gas from its growing population and expanding industrial and petrochemical sectors. The upstream oil sector remains off-limits. Four consortia of European, Russian and Chinese firms were awarded gas exploration blocs in the Empty Quarter in 2003 and 2004. The awards were pared down from an ambitious $25 billion initiative that originally included power and water desalination projects. The consortia have said pre-existing data were limited and that commercial success depended on finding condensates due to the Saudi gas transfer price of 75 cents per million BTU.

South Rub Al Khali (SRAK) - a venture between Saudi Aramco, Total SA and Royal Dutch Shell - said it would target condensate-rich gas spots. "On the commercial side, we need to rely on condensates in order to make these opportunities attractive", SRAK CEO Patrick Allman-Ward said. He said SRAK had an exit option after three consecutive dry wells but that it was "determined" to carry out the project. He added: "If the government sees that there are dry gas resources of a significant size that cannot be commercially developed because of a lack of condensate in it, I am sure it will be in the interest of the government and kingdom to arrive at some kind of solution to allow these to be developed commercially". SRAK drilled its first exploration well this year and a second is planned in early 2007.

LUKsar, a venture of Saudi Aramco and LUKoil drilled two wells and plans a third this year.

ENIREPSA Gas - which groups Eni, Repsol and Saudi Aramco - is drilling its first well.

Sino Saudi Gas, a venture of Sinopec and Saudi Aramco, has drilled two wells and said there would be another two by year-end.

Khalid al-Faleh, a senior vice-president for industrial relations at Saudi Aramco, said the consortia could start producing by 2011 or 2012, and added that theoretically could produce "a couple of billion" cubic feet/day collectively.

Domestic sales gas demand is expected to rise to 14.5 BCF/day by 2030 from around 7 BCF/day now. Faleh said Saudi Arabia may export gas in the future, adding: "We're talking five to 10 years if we get positive results from our own exploration programme and that of the IOC joint ventures". Abdullah al-Na'im, vice-president for exploration at Saudi Aramco, said the firm's 2007-2011 development plan aimed for the drilling of more than 300 development wells and around 70 exploration wells. Na'im added: "[Saudi] Aramco's goal is to add at least an additional 50 TCF of non-associated gas reserves. Saudi Arabia will then have gas reserves surpassing those of North America. In previous phases of gas and oil exploration nearly all our efforts were focused near existing facilities...[Saudi] Aramco is expanding its exploration programme to reflect new gas demand".

Aramco's next grassroots gas development will be the offshore Karan field, where it aims to start 1,000 MCF/day of production in 2011. The Khursaniyah gas plant capacity will be doubled to 2,000 MCF/day to process Karan gas. Faleh also said Hawiyah NGL plant, meant to process nearly 4,000 BCF/day of gas, would be expanded by 800 MCF/day.