Jun 10 2013

Saudi Aramco Starts Construction for Midyan Gas Field

Saudi Aramco Starts Construction for Midyan Gas Field Photo Credit:REUTERS/Ali Jarekji

Monday, Jun 10, 2013

(This article was first published on Sunday.)

By Summer Said

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. (500510.BY) marked the official start of the project, Aramco recently said in a statement on its website.

The Midyan gas plant, located about 195 kilometers west of Tabuk and 135 kilometers 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 75 million standard cubic feet a day of non-associated gas and 4,500 barrels a day of condensate.

Aramco also plans to build two pipelines stretching a length of 98 kilometers to deliver sales gas and stabilized 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 10.72 billion cubic feet a day in 2012 from 9.88 billion cubic feet a day in 2011, while gas reserves rose to 284.8 trillion standard cubic feet from 282.6 trillion standard cubic feet.

Write to Summer Said at summer.said@dowjones.com

(END) Dow Jones Newswires

10-06-13 0343GMT

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