Saudi Aramco seeks interest for work on unconventional gas-sources

KHOBAR, Saudi Arabia Fri Aug 29, 2014 4:58am EDT

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KHOBAR, Saudi Arabia Aug 29 (Reuters) - Four companies have expressed interest in bidding for work on unconventional gas in Saudi Arabia as the world's top oil exporter pushes ahead with plans to develop challenging shale deposits, industry sources said.

The companies are South Korea's GS Engineering and Construction, Italy's Maire Tecnimont, Japan's JGC and Canada's SNC-Lavalin, the sources told Reuters.

State-run Saudi Aramco's project will involve building processing facilities, wellheads and pipelines for the gas in Turaif in the northern part of Saudi Arabia where the big mining project Waad al-Shamal is under development, the sources said.

Saudi Aramco, SNC-Lavalin, JGC and GS declined to comment, while Maire Tecnimont was not available for comment.

The search for gas has been a priority for Saudi Arabia as it struggles to keep pace with rapidly rising domestic demand.

Aramco plans to produce as much as 200 million cubic feet per day of unconventional natural gas by 2018 to supply the Waad al-Shamal project and a power plant.

Inspired by a shale gas surge in the United States, which has transformed it from the world's largest gas importer to an exporter, Saudi has begun investigating its large unconventional gas reserves.

The kingdom has made appraisals in the northwest area, the Eastern Province and in the Empty Quarter, but the hunt is yet to prove fruitful.

Saudi Arabia, which holds the world's fifth-largest proven reserves of gas, expects domestic demand for natural gas - which it uses mainly for power generation - almost to double by 2030 from 2011 levels of 3.5 trillion cubic feet per year.

Saudi Oil Minister Ali al-Naimi had estimated the country's unconventional gas reserves - those held in reservoirs that have not been traditionally exploited - at over 600 trillion cubic feet, more than double its proven conventional reserves.

Aramco Chief Executive Khalid al-Falih has said Riyadh will spend $3 billion on shale gas development in the kingdom but has given no details on the investment. (Reporting by Reem Shamseddine; Additional reporting by Yuka Obayashi,; Solarina Ho,; Francesca Landini and Joyce Lee; Editing by Rania El Gamal and Dale Hudson)

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