December 14, 2010 / 12:09 PM / 9 years ago

UPDATE 1-Aramco in deals with GE for Shaybah oilfield

* Shaybah’s crude production capacity to reach 1 million bpd

* GE to supply equipment in the first half of 2012

(Adds details)

KHOBAR, Saudi Arabia, Dec 14 (Reuters) - State oil giant Saudi Aramco [SDABO.UL] signed deals with General Electric (GE.N) worth around $500 million to expand gas-oil processing facilities at its Shaybah oilfield, the U.S. company said on Tuesday.

After the expansion, the field’s production capacity would rise to 1 million barrels per day (bpd) from 750,000 bpd now, GE said in an emailed statement.

The project would also enhance oil recovery at Shaybah, GE said.

GE said it would supply, in the first half of 2012, 11 gas turbine-generators, 44 compressors, motors and services to generate 729 megawatts (MW) of power.

Last year, Aramco completed a massive crude oil expansion programme that took its production capacity to 12 million bpd, boosting the kingdom’s total production capacity to 12.5 million bpd.

The expansion included increasing capacity at Shaybah oilfield from 250,000 bpd. Shaybah pumps Arab extra light crude, liked by refiners as it is easier to refine than heavier crudes.

Ali al-Naimi, oil minister of the world’s largest oil exporter was quoted as saying in June that Saudi Arabia was unlikely to need to boost its crude production capacity beyond 12.5 million bpd until 2020. [ID:nLDE6592B8]

The expansion in capacity was completed as the economy slowed and the kingdom cut output, leaving Saudi Arabia sitting on at least 4 million bpd of spare capacity, more than double the 1.5 million to 2.0 million bpd cushion it aims to keep to meet any surprise outages in global supply.

“The new expansion is expected to enable Saudi Aramco to further increase crude production to 1 million bpd and increase the gas-oil ratio (GOR) of the field from 1,800 to 7,200 standard cubic feet per stock tank barrel (scf/stb),” GE said.

Aramco’s crude output fell by a million bpd in 2009 to 7.9 million bpd from 8.9 million bpd in 2008 as the kingdom led OPEC in making steep production curbs. [ID:nLDE65E0YY]

The new Shaybah Natural Gas Liquids (NGL) plant which would process 2.4 billion cfd of sweet gas and extract 264,000 bpd of NGL is a key part of the expansion, the U.S. company said.

Aramco is pressing ahead with the expansion of gas output to cater for rising domestic demand growing at 5 to 6 percent annually.

Shaybah NGL is one of two big gas projects Aramco is currently developing. The other is Wasit. Both are due online in 2014. (Reporting by Reem Shamseddine; editing by James Jukwey)

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