Gas plant

''Perhaps oil is the first thing associated with Saudi Arabia by the outside world, but to us gas is equally essential to our continued economic growth." With those words Minister of Petroleum and Mineral Resources Ali Al-Naimi recently put into perspective the growing importance of natural gas to Saudi Arabia's future.

As the world leader in proven reserves as well as in production and exports, Saudi Arabia relies heavily on oil. But while oil is and will continue to be an important source of revenue, the Kingdom increasingly is looking to natural gas as a means for sustained industrial and economic growth into the next century.

Up until a little more than 20 years ago, gas as a viable source of energy was treated as the little brother of oil, sometimes used to ensure high rates of oil output, but often ignored and rejected. In the production of oil, most fields emit large quantities of associated gas. Up until the 1970s it was a common practice by the global oil industry to reinject some of this associated gas back into oil fields to maintain high reservoir pressure vital to oil production. The rest was flared at the oil fields. Indeed, the eerie nighttime glow produced by burning gas at the wellhead used to be a characteristic feature of oil production operations worldwide.

This seeming waste was due to the high cost of building facilities to collect, process and transport the gas produced as a byproduct of oil. However, the unprecedented rise in world energy prices in the early 1970s, coupled with a growing public awareness of the necessity of environmental protection and energy conservation, brought about a reevaluation of the importance of natural gas. As demand for this clean-burning, efficient fuel grew, the major investments necessary to build huge gas gathering and processing networks and plants gradually became more practical and potentially profitable.

Saudi Arabia, recognizing the extent of its natural gas reserves, was among the first nations to act. In what at the time seemed an ambitious undertaking, and was later proven to be a prudent one, Saudi Arabia launched a mammoth project in 1975 to study, design and build an extensive network capable of collecting, processing and utilizing associated gas from its many wells in the Eastern Province.

The flares would be put out for good, and instead the gas would be collected to be used as an energy source and, more importantly, as feedstock for a broad new complex of basic industries.

Field Ops

Gas Plant

Saudi Arabia's extensive network of pipelines, gas oil separation plants, processing plants and fractionation complexes facilitate domestic economic growth and generate export revenue.

By 1980, Saudi Aramco, the national oil company, completed the Master Gas System (MGS). As part of the project, a large number of gas oil separation plants (GOSPs) were established at the oil fields. Hundreds of miles of pipelines were built to bring the gas to three new processing plants. The Berri plant, completed in 1977, is located near the Jubail Industrial City on the Arabian Gulf. The other two plants, Shedgum and Othmaniah, are located in the oil fields of the Eastern Province.

Gas is treated at these three plants to remove toxic and corrosive compounds, including hydrogen sulfide and carbon dioxide. Further processing produces a sweet, dry residue gas, known as sales gas, which is composed primarily of methane. Compressed, methane is sent via the gas grid to utilities and industrial plants to be used as fuel and feedstock. This process also produces elemental sulfur as a byproduct, which is then sent to a pelletizing plant at Jubail. The sulfur is then used both domestically and exported through a dedicated terminal. Sulfur is also produced in molten form, which is used by domestic industries.

As part of the process, the Berri, Shedgum and Othmaniah plants also produce natural gas liquids (NGL), which are piped to fractionation plants established at Ras Tanura and Juaymah on the Gulf, or to a similar facility in the Yanbu Industrial City on the Red Sea. NGL for Yanbu is transported through a 726-mile dedicated pipeline.

These plants split the liquids into ethane - which is used as fuel and feedstock by industrial plants -and propane, butane, as well as natural gasoline. The propane and butane, known as liquefied petroleum gas (LPG) is refrigerated at new plants and exported through Juaymah and Yanbu. The natural gasoline is exported from Ras Tanura.

Gas Plant



Beginning in 1984, the MGS was expanded to incorporate associated gas produced from offshore fields in the Gulf and upgraded to gather and process nonassociated gas - which is produced not as a byproduct of oil - but from natural gas fields, such as the Khuff field, some 2.5 miles below the surface of the Eastern Province. The vast MGS network currently has a total sales gas capacity of approximately three billion standard cubic feet per day (scfd).Expansion underway at the three processing plants will increase their capacity by one billion scfd.

Concurrent with the massive effort to establish the MGS in the late 1970s, Saudi Arabia undertook a parallel program to build an industrial base to use the natural gas both as fuel and as feedstock. This program centered on the twin industrial cities of Jubail and Yanbu.

The Royal Commission for Jubail and Yanbu moved rapidly to establish the infrastructure of roads, ports, telecommunication, utilities, desalination plants, housing, schools, clinics and other facilities needed to support a thriving industrial sector at the two sites. In its first phase of expansion, completed in 1985, it invested more than seven billion U.S. dollars on the venture. The second phase, from 1986 to 1992, focused on consolidation and efficiency. Since 1993, the two cities have entered a new era of rapid expansion with hundreds of smaller industrial units being established at the two ports.

Once the sites were prepared during the first phase, the Saudi Arabian Basic Industries Corporation (SABIC) built 14 modern primary industrial complexes in the two cities. Some use the methane and ethane supplied by the MGS to produce plastics and chemicals. Most of these products are then sent to other SABIC plants for use as feedstock to manufacture advanced plastics and fertilizers, some of which are exported. Secondary industries established by the private sector at Jubail and Yanbu also use these products to manufacture industrial and consumer goods, from steel rebars to soda bottles. The gas supplied by the MGS also powers petrochemical plants built by Saudi Aramco and other companies, as well as power generation plants and desalination facilities.

In short, an energy source that was once wasted has been transformed into the backbone of Saudi Arabia's vast and growing industrial sector. As an example, in 1997, SABIC facilities alone converted natural gas components into some 23 million metric tons of chemicals, plastics, fibers, fertilizers and steel products worth 6.4 billion dollars. Other industrial units, both primary and secondary, produced billions of dollars worth of products.

The success of Saudi Arabia's effort to reap the greatest possible economic benefit from its natural gas resources has generated new challenges. As abundant and relatively inexpensive supplies of gas were made available to industrial facilities in the Kingdom, demand began to grow steadily. This was due to two factors. First, the completion of the Kingdom's infrastructure and industrial base triggered a rapid growth in industrial and economic activity, which in turn increased demand for gas. Second, many utilities and industrial facilities that previously used oil as their principal energy source switched over from oil to less expensive and cleaner-burning gas. New utilities being built or planned, such as two new power generation facilities being established in Riyadh and Dammam, will all be gas-fired, further raising demand for natural gas in years to come. The move away from oil to gas as the primary energy source for power generation and desalination plants is making such operations more cost effective and, at the same time, allows the oil once used in such industries to be exported.

Gas Plant

Gas Plant

Modern facilities and highly trained personnel ensure the success of Saudi Arabia's efforts to harness its vast natural gas reserves.

The Ministry of Petroleum and Mineral Resources estimates that total demand for sales gas, which reached approximately two billion scfd in 1988, and rose above three billion scfd in 1997, is expected to surpass seven billion scfd in the year 2007.

To meet the surge in demand, Saudi Arabia plans to invest between seven and 10 billion dollars to double natural gas production in the next decade. Minister Al-Naimi said recently that this objective will be achieved through "aggressive efforts to find and produce new gas fields." He explained that extensive exploration efforts are underway to identify at least five trillion cubic feet of proven reserves each year. The focus of the exploration will be on finding nonassociated gas fields. The Kingdom's proven gas reserves stood at 204 trillion cubic feet in 1997, the fifth largest in the world. As more gas is produced, the MGS will be expanded further, by increasing the capacity of processing plants and building new ones, as well as laying new pipelines.

Gas Plant

Methane and ethane produced by processing and fractionation plants are used as fuel and feedstock by industrial facilities, such as SABIC's Petrokemya complex in Jubail (above), to produce chemicals, plastics, fertilizers, metals and other assorted products.

Recently, Saudi Aramco completed studies to build a new plant to process 1.6 billion scfd of nonassociated gas from the Khuff reservoir. Located 110 miles south of Dammam in the Eastern Province, the proposed Hawiyah Gas Development Program will provide gas through a new network of distribution pipelines to power plants in the Riyadh area, some 170 miles to the west. To do so, some 500 miles of pipeline ranging in diameter from 24 to 56 inches will have to be laid. Once completed, Hawiyah will rank among the largest gas processing plants in the world and more than meet demand in the Kingdom.

Yet as Minister Al-Naimi points out, demand will continue to rise in the next century, particularly as the economy diversifies and expands further. Therefore, the Kingdom is looking at further expansion of the MGS, with the possibility of extending pipelines to the major industrial area around Jeddah.

With proper advance planning, Saudi Arabia has managed to transform a resource that was once almost completely wasted into a valuable commodity, generating export revenue and facilitating domestic economic growth. Today, the Kingdom continues to rely on prudent planning to maintain and develop this resource and further strengthen what has been called the backbone of the Saudi economy.

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