Aramco Signs Over $25 Billion of Deals for Main Gas Network, Jafurah Gas Field

This picture shows Aramco tower (C) at the King Abdullah Financial District (KAFD) in Riyadh on April 16, 2023. (AFP via Getty Images)
This picture shows Aramco tower (C) at the King Abdullah Financial District (KAFD) in Riyadh on April 16, 2023. (AFP via Getty Images)
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Aramco Signs Over $25 Billion of Deals for Main Gas Network, Jafurah Gas Field

This picture shows Aramco tower (C) at the King Abdullah Financial District (KAFD) in Riyadh on April 16, 2023. (AFP via Getty Images)
This picture shows Aramco tower (C) at the King Abdullah Financial District (KAFD) in Riyadh on April 16, 2023. (AFP via Getty Images)

Saudi Arabia's state oil company Aramco has signed contracts worth more than $25 billion for the second phase of the expansion of its Jafurah gas field and the third phase of expanding its main gas network, its CEO Amin Nasser said on Sunday.

Jafurah is the kingdom's largest unconventional non-oil associated gas field and is potentially the biggest shale gas development outside the United States, with reserves reaching 229 trillion cubic feet of gas and 75 billion barrels of condensates.

"By generating an anticipated 2 billion standard cubic feet per day of sales gas by 2030, this bold initiative will strengthen Saudi Arabia's position as one of the top national gas producers in the world", said Nasser, speaking of the Jafurah field at a contracts award ceremony in Dhahran.

The main gas network expansion will add 4,000 more kilometers of pipelines, boosting capacity by around 3.2 billion standard cubic feet per day and connecting several additional cities from across the country to the network, he said.

The awarded contracts are worth more than $25 billion, and will target sales gas production growth of more than 60% by 2030, compared to 2021 levels.

The contract awards "demonstrate our firm belief in the future of gas as an important energy source, as well as a vital feedstock for downstream industries. The scale of our ongoing investment at Jafurah and the expansion of our Master Gas System underscores our intention to further integrate and grow our gas business to meet anticipated rising demand," Nasser noted.

"This complements the diversification of our portfolio, creates new employment opportunities, and supports the Kingdom’s transition towards a lower-emission power grid, in which gas and renewables gradually displace liquids-based power generation. To get where we are today, a lot of hard work, innovation and a strong ‘can do’ spirit has been demonstrated by teams across our vast network of suppliers and service providers, who have joined Aramco on this journey to build and expand our world-class energy infrastructure,” he added.

According to Aramco, the Company has awarded 16 contracts, worth a combined total of around $12.4 billion, for phase two development at Jafurah. The work will involve construction of gas compression facilities and associated pipelines, expansion of the Jafurah Gas Plant including construction of gas processing trains, and utilities, sulfur and export facilities. It will also involve construction of the Company’s new Riyas Natural Gas Liquids (NGL) fractionation facilities in Jubail — including NGL fractionation trains, and utilities, storage and export facilities — to process NGL received from Jafurah.

Another 15 lump sum turnkey contracts, worth a combined total of around $8.8 billion, have been awarded to commence the phase three expansion of the Master Gas System, which delivers natural gas to customers across the Kingdom of Saudi Arabia. The expansion, being conducted in collaboration with the Ministry of Energy, will increase the size of the network and raise its total capacity by an additional 3.15 billion standard cubic feet per day (bscfd) by 2028, through the installation of around 4,000km of pipelines and 17 new gas compression trains.

An additional 23 gas rig contracts worth $2.4bn have also been awarded, along with two directional drilling contracts worth $612 million. Meanwhile, 13 well tie-in contracts at Jafurah, worth a total of $1.63bn, have been awarded between December 2022 and May 2024.



Oil Stocks in US Strategic Petroleum Reserve Fall to Lowest Level since 1982

Crude oil, gasoline, and diesel storage tanks at Kinder Morgan's facility in Los Angeles (Reuters)
Crude oil, gasoline, and diesel storage tanks at Kinder Morgan's facility in Los Angeles (Reuters)
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Oil Stocks in US Strategic Petroleum Reserve Fall to Lowest Level since 1982

Crude oil, gasoline, and diesel storage tanks at Kinder Morgan's facility in Los Angeles (Reuters)
Crude oil, gasoline, and diesel storage tanks at Kinder Morgan's facility in Los Angeles (Reuters)

Stocks of crude oil in the US Strategic Petroleum Reserve fell to 283 million barrels last week, the lowest level since October 1982, according to data from the Department of Energy, Reuters reported.

The drawdowns are part of a US agreement to release 172 million barrels from the facility.

Additionally, the Trump administration last week said it is offering to loan energy companies 40 million barrels of oil from the Strategic Petroleum Reserve.


Saudi Market Resumes Decline Under Pressure from Banking Sector

A man monitors trading screens in the Saudi market (Saudi Exchange)
A man monitors trading screens in the Saudi market (Saudi Exchange)
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Saudi Market Resumes Decline Under Pressure from Banking Sector

A man monitors trading screens in the Saudi market (Saudi Exchange)
A man monitors trading screens in the Saudi market (Saudi Exchange)

The Saudi Exchange's main index, TASI, resumed its decline at the close of Monday's trading, falling 0.25 percent to 10,479 points.

The decline was driven by losses in a number of stocks. On Sunday, the index had ended a losing streak, rising about 1 percent.

Riyadh Development Company (Ridan) led the decliners, falling 4.43 percent to SAR18.13, followed by SNB, which dropped 2.77 percent to SAR38.60, and BSF, which fell 2.75 percent to SAR19.80.

On the other hand, Saudi Fisheries Company led the gainers, rising 9.96 percent to SAR51.90, followed by East Pipes Integrated Company, which gained 7.70 percent to SAR184.70, and Leden, which rose 6.98 percent to SAR1.84.


Saudi Arabia's SAL Expands Logistics Options as Global Trade Map Shifts

A SAL booth at the Saudi Warehousing & Logistics Expo (Asharq Al-Awsat)
A SAL booth at the Saudi Warehousing & Logistics Expo (Asharq Al-Awsat)
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Saudi Arabia's SAL Expands Logistics Options as Global Trade Map Shifts

A SAL booth at the Saudi Warehousing & Logistics Expo (Asharq Al-Awsat)
A SAL booth at the Saudi Warehousing & Logistics Expo (Asharq Al-Awsat)

The speed and cost of transporting shipments are no longer the only factors determining companies' choices in the logistics services market. Geopolitical disruptions and changes in global trade routes have redefined the concept of supply chain efficiency. Securing transportation alternatives, the ability to shift quickly between routes and modes of transport, and ensuring the uninterrupted flow of goods have become more prominent factors in customer decisions.

In Saudi Arabia, this shift is reflected in growing demand for integrated logistics services, alongside the expansion of industrial activity, imports, and infrastructure investment. Companies operating in the sector are taking advantage of this trend to expand their operational capabilities and develop solutions that combine air, land, and sea transport, providing greater flexibility in response to changes in global trade.

SAL is among the leading beneficiaries of this demand, having recorded its highest quarterly revenue in its history during the second quarter of this year, at SAR512.1 million ($136.6 million), up 30 percent year on year. Net profit rose 18 percent to about SAR191 million ($50.9 million). In the first half of the year, revenue increased 23.1 percent to SAR957.9 million ($255.4 million).

Rayan Al-Bakri, CEO of SAL's logistics business, said that "reliability and flexibility have become among the most important factors influencing customer decisions and global supply chains." He noted that when certain trade routes or transportation channels face operational challenges or unexpected changes, customers turn to solutions that ensure business continuity and speed of access to markets.

He added in an exclusive statement to Asharq Al-Awsat that SAL is seeing growing interest in integrated logistics solutions that combine more than one mode of transport according to each customer's needs. He explained that the company does not view air or land freight as direct alternatives to sea transport, but rather as complementary elements within a single system designed to achieve efficiency and flexibility in the movement of goods.

Al-Bakri said that "goods always find a way to reach the end customer, with the means varying," noting that the company continues to leverage strategic partnerships to expand logistics connectivity options for customers.

In this context, he pointed to SAL's cooperation with SPARK Logistics to activate a new land corridor between the Port of Sohar in Oman and the dry port at King Salman Energy Park (SPARK). He said the route strengthens regional trade flows and increases the flexibility and reliability of supply chains.

He also pointed to increased operating capacity at airports and the provision of solutions to receive and accommodate demand from customers and partners in the domestic and Gulf markets, alongside connecting airports through an integrated operating network to enhance supply chain flexibility.

Positive Demand Outlook

Al-Bakri views the outlook for demand for SAL's services positively in the coming period, amid continued growth in inbound shipments and expanding imports of spare parts and equipment related to industrial activities, as well as rising demand for more integrated and flexible logistics solutions across the region.

According to Al-Bakri, this outlook is based on several factors, including the diversity of the customer base, the expansion of specialized logistics services, and the investments the company is making to strengthen its operational capabilities and infrastructure.

Domestic consumption and the building of strategic inventories for most products are also creating opportunities for sustainable growth across the sector as a whole.

At the same time, the sector is dealing with a range of global variables that could affect profitability and operating costs, including transportation, insurance, and energy costs, as well as geopolitical developments that could affect international trade flows.

Al-Bakri said SAL is focusing instead on improving operational efficiency, increasing productivity, leveraging modern technologies, and diversifying revenue sources to support sustainable performance over the long term.

He added that the ability to adapt quickly to changes, along with operational discipline and continued investment in value-added services, would remain among the key factors supporting the company's performance in the coming period, ensuring business continuity and maintaining service levels for partners and customers across different sectors and services.

Infrastructure Expansion

Investment in infrastructure and operational capabilities is a key part of SAL's growth strategy. The company is working on a range of parallel initiatives aimed at increasing operational readiness, enabling the logistics sector, and strengthening the Kingdom's position as a global logistics hub.

Al-Bakri said the company's current priorities include expanding operational capabilities at airports across the Kingdom, developing SAL logistics zones, and investing in digital solutions and smart technologies that improve operational efficiency and accelerate the flow of shipments through the various stages of the supply chain.

SAL is also focusing on developing infrastructure that supports specialized services and integrated logistics solutions in line with the needs of the Kingdom's vital and growing sectors.

In this context, Al-Bakri said the company is continuing to expand its international presence through the acquisition of Aviapartner Liège, strengthening connections between its customers and one of Europe's air cargo hubs and supporting SAL's reach across global trade routes.

At the same time, the company is expanding its network of global partnerships supporting the development of advanced infrastructure and logistics services. These include two memorandums of understanding signed with CIMC Middle East to explore cooperation opportunities in cargo handling systems, automation, robotics, and autonomous vehicles.

The areas of cooperation include developing facilities and warehouses within SAL's logistics zones and attracting global investments and companies to the Kingdom, strengthening its position as a regional hub for manufacturing, logistics services, and international trade.

Automation and Specialized Services

As part of its digital transformation, SAL continues to invest in modern technologies and smart solutions, including cooperation with Huawei Tech Investment Saudi Arabia to explore applications of artificial intelligence, 5G, and cloud computing in the logistics sector.

Al-Bakri said these efforts support the development of smarter logistics zones, improve operational efficiency, and enhance the customer experience across the various stages of the supply chain.

At the same time, specialized logistics services, particularly pharmaceutical, medical, and temperature-controlled shipments, continue to grow amid the high levels of precision and reliability required by these sectors.

He said these services are becoming increasingly important within SAL's strategy because they require advanced operational capabilities, specialized infrastructure, and specialized expertise, in addition to the value they provide to customers.

According to Al-Bakri, the company continues to accelerate its automation and digital transformation efforts through investment in smart technologies and solutions that improve operational efficiency, handling accuracy, and decision-making speed.

SAL is also focused on sustainability by adopting practices and solutions that contribute to more efficient use of resources and support the objectives of the logistics sector in the Kingdom.

Al-Bakri said the company's direction is to expand specialized and integrated services, support them with modern technologies, and develop more sustainable logistics solutions that meet customer expectations and keep pace with the transformation taking place in the sector at both the regional and global levels.