Saudi Aramco Pursues 50,000 B/D Dammam Redevelopment
State-owned Saudi Aramco is returning to its Dammam field, developed in the late 1930s and shut in after decades of production, to launch the company’s first major crude production initiative in urban areas. The company is looking at producing around 50,000 b/d of oil and 100mn cfd of gas from the project. Estimated investment should not be more than $250mn, MEES understands. This is substantially less than the 100,000 b/d increment and $1.2bn investment cost estimate in some reports. The project will involve the drilling of eight wells in the built-up Dhahran area, with around 150,000 b/d of water injection and the construction of a 20in pipeline for the crude and a 30in pipeline for the gas which will be transported 45km to Abqaiq. The gas will then go onto Shedgum for processing. Prequalification is to be done by 25 October, with awards for the front end engineering and project management to be made by 23 December, a schedule some contractors say is overly ambitious. It is hoped to award construction contracts in about a year.
Saudi Aramco launched a 3-D seismic campaign in Dhahran city in November 2006 (MEES, 13 November 2006), but the project had gone quiet for the past year or so, with most assuming it had been shelved. One possible catalyst for the decision to resurrect the initiative could be the gas element of the project. The Kingdom has had a dearth of gas discoveries of late and international gas consortia searching for gas in the Empty Quarter have yet to make any commercial discoveries. This comes against a background of surging demand.
Saudi Aramco has increased the scope of its offshore Karan gas project twice in the last six months, most recently expanding its capacity to 1.8bn cfd (MEES, 20 October). Contractors also report that the company is close to launching a project to build a new 1-1.5bn cfd gas plant in the southeast of the country. While not confirmed, this is believed to be the long-awaited decision on the exploitation of Shaybah’s associated gas cap, believed to hold 25-30 trillion cu ft. Shaybah, located near the UAE border, is a long way from customers and the project is thought to pose significant technical challenges, making it considerably more expensive than the 75 cents/mn BTU internal Saudi gas price would make viable. One added benefit of any gas development at Shaybah would be that it might make viable the development of nearby areas currently being explored by the Shell-led SRAK venture, which is currently drilling around the Kidan gas field with one of the most expensive onshore wells in history (MEES, 28 July).
Copyright MEES 2008.
