Multibillion-dollar project for Saudi Government will utilize most of some 3,7 billion cfd of associated gas now flared. Methane will go to industry, with gas liquids moving to both coast in separate system.

ARABIAN AMERICAN Oil Co. is preparing to undertake one of the biggest engineering and construction programes in history.

The company said last week it will design, build, and operate for the Saudi Arabian Government a multi-billion-dollar gas and gas-liquids system to serve planned industrial centers on both Saudi coasts.

The system will include gas-gathering lines, gas-processing facilites, and separate transmission systems for gas and gas liquids. It will involve laying more than 1,200 miles of trunk transmission and gathering lines.

Aramco hasn’ t disclosed a price tag for the project, but unofficial sources estimate the total cost at $4,5 billion. Start-up for the system is targeted for 1977.

Aramco says the project means the company is assuming "a new, expanded role" in the industrialization of Saudi Arabia. The Saudi Government asked the company late in February to develop and operate the project.

Long lines. Major elements of Aramco project include separate pipeline systems to move methane along Saudi Arabia’ s eastern coast and ethane and L.P-gas to both coasts.

Throughput will come from associated gas gathered from nearly all of Aramco’ s oil fields. The company says it’ s also studying a program for exploration and development of nonassociated gas.

Aramco will gather and transmit gas 180 miles from its offshore Zuluf/Marjan field and 240 miles from the southern end of Ghawar field, the world’ s largest.

Gas also will be gathered from clusters of gas-oil separators in various producing areas for transmission to six or more central locations, where it will be desulfurized and dehydrated. Gas will then be separated into a methane stream and a liquid stream-ethane, propane, butane, and natural gasoline.

Methane will be moved into a drygas grid to supply fuel for a wide variety of government and privately sponsored projects such as sea-water desalination plants, electric-power generation plants, a steel mill, an aluminum plant, refineries, and other elements of planned industrial complexes along the Persian Gulf coast.

A portion of the methane may also be used in Saudi joint ventures with U.S. and other companies for fertilizers and into hydrogen for the reduction of iron ore to steel as well as for desulfurization of crude oil.

Liquids will be shipped in a separate NGL-pipeline network to Aramco’ s refinery and terminal at Ras Tanura on the Persian Gulf for fractionation and via a new 825-mile line across the Arabian Peninsula to Yanbu on the Red Sea coast where the government plans a major industrial complex.

Ethane will be used as petrochemical feedstock.

Butane, propane, and natural gasoline will be expored at first, with increasing amounts used later for petrochemical feedstock in Saudi Arabia.

Master plan. The master plan for the project, developed by state-owned General Petroleum & Minerals Organization (Petromin), calls for domestic use of virtually all of Saudi Arabia’ s gas production. Texas Eastern Transmission Corp, reportedly served as consultant in development of the plan.

Aramco hasn’ t specified the gas volume that will be available to the overall system. But accordling to the latest figures compiled by the Organization of Petroleum Exporting Countries, Aramco produced about 4,3 billion cfd of gas in 1973 and flared almost 3,7 billion cfd.

The company will use its present NGL facilities and gas-gathering system as the cornestone for the huge project.

Even before the February request from the government, Aramco was building facilities to boost its NGL production to 360,000 b/d by mid-1977 from the present 188,000, Aramco’ s Berri field gas facilities, currently under construction, will provide fuel and feedstock for the first phase of the government’ s industrialization program in the Al Jubail area on the east coast as well as NGL for export.

Saudi Arab technicians in training to man Aramco gas-processing plants scheduled to come on stream through mid-1977 will be integrated into the new gas plan, as will the company’ s expatriate work force. In addition, Aramco will intensify its recrultment efforts in Saudi Arabia and other countries and will expand its training programs.

Planned plants. Several plants are in planning stages to serve as initial installations in the plan for Saudi industrialization.

Mobil Oil Corp, a part-interest owner in Aramco, has been negotiating with Petromin on participation in a 500,000 b/d refinery to be built on the Red Sea coast, which would be the terminus of a 1million b/d crude line (OGJ, Sept, 16, 1974, p. 39).

And at Al Jubail, Shell Oil Co, and Petromin have signed an agreement in principe to build a $1 billion olefinsbased petrochemical complex.

Also at Al Jubail, Houston Natural Gas Corp, and Petromin each would own 50% of proposed facilities to include a 12,500 ton/day methanol plant and related storage facilities. An HNG subsidiary would buy the methanol, ship it to a U.S. port, and sell it to utilities. Letters of intent have been signed with four U.S. utilities.

Thornton jack up
sold after repairs

THE. C. E. Thornton, a jack-up rig formerly owned by Reading & Bates Offshore Drilling Co., has been sold by Travelers Insurance Cos. for $4,5 million.

The new owner, Southern Hope Inc., a Panamanian corporation, took over the rig at its berth in Port Qaboos near Muscat, Oman. It was repaired there after its recovery last May from the coast of the Arabian Sea, 500 miles to the south.

The rig had been declared a total loss after it ran aground in 1973.

THE OIL AND GAS JOURNAL - MARCH 24, 1975