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Saudi Arabia Forges Ahead with Jafurah Shale Gas Field Development  

A view of the Jafurah Shale Gas Field. (Saudi Aramco)
A view of the Jafurah Shale Gas Field. (Saudi Aramco)
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Saudi Arabia Forges Ahead with Jafurah Shale Gas Field Development  

A view of the Jafurah Shale Gas Field. (Saudi Aramco)
A view of the Jafurah Shale Gas Field. (Saudi Aramco)

Saudi Aramco is pressing ahead with one of its most ambitious energy initiatives to date: the development of the Jafurah unconventional gas field, the largest of its kind in the Middle East, as part of a broader strategy to diversify the Kingdom’s energy mix and boost domestic gas output.

Located in the Eastern Province’s Jafurah Basin, which spans around 17,000 square kilometers, the project is seen as a cornerstone of Aramco’s transformation. The first phase is scheduled for completion in 2025, with plans to ramp up production to a sustained 2 billion standard cubic feet per day (scfd) of gas by 2030, alongside large volumes of ethane, natural gas liquids (NGLs), and condensates.

Speaking during the company’s second-quarter earnings announcement on Monday, Aramco CEO Amin Nasser confirmed that development at the Jafurah Gas Plant remains on track. The company posted net profits of $24.5 billion for the quarter, down from $29.07 billion a year earlier.

Jafurah holds an estimated 200 trillion standard cubic feet of natural gas, making it the richest shale gas play in the region. Aramco plans to invest more than $100 billion over the next 15 years to fully develop the field.

At the Al-Ahsa Investment Forum 2025, Nasser said the project is expected to contribute approximately $23 billion annually to Saudi Arabia’s GDP. It also aligns with Aramco’s goal to increase gas production capacity by over 60% by the end of the decade.

Global partnerships

According to former Saudi oil ministry adviser Dr. Mohammed Al-Sabban, the Jafurah field contains significant unconventional gas reserves, specifically shale gas, and may open the door to further technological partnerships.

“Given the complexity of the geology, Aramco could seek international partners with advanced expertise in shale gas extraction,” Al-Sabban told Asharq Al-Awsat.

He added that Saudi Arabia’s simultaneous expansion in oil, gas, and renewable energy investments positions the Kingdom as a comprehensive energy provider, rather than merely an oil exporter.

Decarbonization and industrial integration

The Jafurah project is also central to Aramco’s decarbonization drive, supporting the company's net-zero emissions target by 2050. It will provide high-value feedstock for the refining, processing, and petrochemicals sectors, including ethane, NGLs, and condensates.

Due to the low permeability and porosity of the basin’s shale formations, the project depends on advanced horizontal drilling and hydraulic fracturing techniques to extract gas from the sedimentary rocks of the Tuwaiq Mountain.

These technical demands classify Jafurah as an unconventional field, requiring specialized equipment and risk management protocols.

Aramco began by drilling both horizontal and vertical wells after confirming vast hydrocarbon deposits, alongside developing talent and creating detailed geologic maps to guide a three-year appraisal phase.

Billion-dollar contracts

On the ground, Aramco has introduced a suite of innovations to boost efficiency and safety. It has deployed mobile drilling rigs that can be relocated in one piece, and implemented advanced fracking practices that allowed the company to drill and complete wells more than five times faster, without traditional rigs, cutting costs and accelerating production timelines.

More than $10 billion in contracts have been awarded for the project’s initial phase, covering the construction of a fully integrated gas supply system. This includes a gas processing facility, an NGL fractionation plant, a gas compression network, and about 1,500 kilometers of pipelines for transportation and distribution, as well as a central power station and electrical infrastructure.

Turning point

Jafurah is not only a gas development megaproject; it is poised to reshape Saudi Arabia’s energy security. Once fully operational, it is expected to offset the equivalent of 500,000 barrels per day of crude oil used for domestic power generation, freeing up those volumes for value-added sectors such as refining and petrochemicals.

By 2030, the field is projected to produce more than 420 million scfd of ethane and up to 630,000 barrels per day of NGLs and condensates, helping to meet surging feedstock demand in the petrochemical industry.

The project is also expected to complement Aramco’s broader plans to scale up production of low-carbon hydrogen and blue ammonia.

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Business

UK Budget Deficit for 2025/26 Narrows to Six-year Low

Skyscrapers in London's financial district (Reuters)
Skyscrapers in London's financial district (Reuters)
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UK Budget Deficit for 2025/26 Narrows to Six-year Low

Skyscrapers in London's financial district (Reuters)
Skyscrapers in London's financial district (Reuters)

Britain's budget deficit for the last financial year narrowed to a six-year low as a percentage of economic output although borrowing for March alone exceeded forecasts, official data showed on Thursday.

The Office for National Statistics reported 132.0 billion pounds ($178.1 billion) of public sector net borrowing in the 2025/26 financial year that ⁠ended in March.

That ⁠was 0.7 billion pounds less than the most recent forecast from the Office for Budget Responsibility and down from 151.9 billion pounds in 2024/25.

Equivalent to 4.3% of ⁠economic output - in line with the OBR prediction - the deficit was the smallest since the 2019/20 financial year, which ended just as the response to the COVID-19 pandemic caused debt to soar.

Debt interest spending in 2025/26 was 97.6 billion pounds, up from 85.4 billion pounds a year ⁠previously ⁠and marking the second-highest figure in cash terms since 2022/23, when inflation soared after Russia's invasion of Ukraine.

Last week, the International Monetary Fund cut Britain's economic growth forecasts for 2026 by more than for any other Group of Seven nation due to the country's exposure to higher energy prices with its heavy use of natural gas.

"A more stagflationary backdrop is forecast to take shape, with speculation already building about the impact of weaker growth on the Chancellor's headroom," Nabil Taleb, economist at PwC UK, said, referring to Reeves' ability to meet her borrowing target.

"Recent moves in bond markets, with gilt yields briefly touching 5% for the first time since 2008 before easing, also highlight the UK's vulnerability to uncertainty."

In March alone, the ONS reported public sector net borrowing of 12.6 billion pounds. Economists polled by Reuters had a median forecast of a 10.3 billion-pound deficit for the month.

Business

Saudi Arabia, Philippines to Join JPMorgan Emerging Market Bond Index in 2027

FILE PHOTO: Signage is seen at the JPMorgan Chase & Co. New York Head Quarters in Manhattan, New York City, US, June 30, 2022. REUTERS/Andrew Kelly/File Photo
FILE PHOTO: Signage is seen at the JPMorgan Chase & Co. New York Head Quarters in Manhattan, New York City, US, June 30, 2022. REUTERS/Andrew Kelly/File Photo
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Saudi Arabia, Philippines to Join JPMorgan Emerging Market Bond Index in 2027

FILE PHOTO: Signage is seen at the JPMorgan Chase & Co. New York Head Quarters in Manhattan, New York City, US, June 30, 2022. REUTERS/Andrew Kelly/File Photo
FILE PHOTO: Signage is seen at the JPMorgan Chase & Co. New York Head Quarters in Manhattan, New York City, US, June 30, 2022. REUTERS/Andrew Kelly/File Photo

J.P. Morgan said on Wednesday that Saudi Arabia and the Philippines will be added to its local currency emerging market debt index from January 29 next year.

The inclusion will cover Saudi riyal-denominated sovereign sukuk and Philippine peso-denominated government bonds, both entering the widely tracked GBI-EM ⁠index series.

Their weights ⁠will be introduced gradually, with Saudi Arabia expected to reach 2.52% and the Philippines 1.78% once fully phased in.

The update is part ⁠of a broader index adjustment, which will lower the "Country Cap" - the maximum weight, or share, any single country can hold in the "diversified" index - to 9% from 10%.

As a result, major markets including China, India, Mexico, Malaysia, and Indonesia will see their ⁠weight ⁠reduced to the new limit.

Based on current eligibility criteria, about eight Saudi sovereign sukuk with a combined value of roughly $69 billion could be included, JPMorgan said.

For the Philippines, nine eligible government bonds with a combined value of around $49 billion are under consideration.

Business

Oil to Fabric: Middle East Crises Reshape Global Fashion

A worker arranges spools of thread at a textile factory in Haiyan, Jiangsu province, China (Reuters)
A worker arranges spools of thread at a textile factory in Haiyan, Jiangsu province, China (Reuters)
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Oil to Fabric: Middle East Crises Reshape Global Fashion

A worker arranges spools of thread at a textile factory in Haiyan, Jiangsu province, China (Reuters)
A worker arranges spools of thread at a textile factory in Haiyan, Jiangsu province, China (Reuters)

Rising oil prices are no longer just an energy market story; they are feeding directly into the cost of clothing. From petrochemical plants to fabric mills and retail racks, a complex supply chain is passing on higher costs, pushing up the final price consumers pay.

According to the “Materials Market 2025” report by the Organization for Textile Exchange, polyester makes up about 59% of global fabric output, with roughly 88% produced from non-recycled petroleum sources, leaving the industry exposed to energy price swings.

Oil prices have surged about 32% since the start of the US-Israeli war on Iran on Feb. 28, approaching $100 per barrel.

Fabrics under oil pressure

Amal Saqr, a textile design consultant, said the sector is highly sensitive to shifts in oil prices because of its reliance on synthetic fibers.

More than 60% of fabrics used in global clothing production depend on petroleum-based materials such as polyester, nylon and acrylic, she said, adding that any rise in oil prices feeds directly into fabric costs.

She pointed to 2008, when polyester prices jumped about 30% within three months as oil hit record highs, forcing Asian spinning mills to cut output by 20% to 25%.

Disruptions in the Red Sea between 2023 and 2024 also drove shipping costs up by about 300%, raising raw material costs and straining supply chains.

Yemen’s Iran-aligned Houthis began targeting ships linked to Israel on Nov. 19, 2023, using drones and missiles.

Natural fabrics not immune

Natural fibers such as cotton and linen avoid direct reliance on oil, but are still exposed to energy costs, Saqr said, noting that farming depends on fertilizers, fuel and transport.

The global fertilizer crisis in 2021 pushed prices up about 80%, driving cotton prices higher by roughly 40%. Later disruptions in the Strait of Hormuz added another 40% increase in fertilizer costs due to shipping delays.

Global cotton production reached about 24.5 million tons in 2024, or roughly 19% of total fiber output, making it less dominant than synthetic fibers but relatively more stable in pricing, according to the Textile Exchange report.

Rising production costs

Higher energy prices are hitting every stage of production, from spinning to dyeing and drying, Saqr said.

With already thin margins, textile factories face a stark choice: raise prices or cut output, both of which ultimately hit consumers.

World Bank data shows operating costs for textile factories in several countries have risen by about 18% following recent energy price increases.

Import markets feel it fast

Import-dependent markets are quick to absorb shocks from shipping or energy disruptions, Saqr said.

Shipping costs from Asia have lifted synthetic fabric prices by 10% to 18%, while imported cotton prices have climbed by 15% to 25%.

Rerouting shipments from the Strait of Hormuz to the Cape of Good Hope has added 10 to 14 days to transit times, leading to shortages and swings in the availability of fabrics and garments.

Value chains under rethink

Burak Cakmak, chief executive of the Saudi Fashion Commission, said the impact of oil prices is not immediate, as final pricing reflects a full value chain including production, marketing and distribution.

Instead of passing costs on, many brands are rethinking how to create value, improving efficiency and working more closely with suppliers, he said.

He also pointed to a shift toward localized production, with brands operating closer to their markets and managing inventory more tightly to control costs and improve flexibility.

Sustainability gains urgency

Sustainability is no longer just an environmental concern; it is tied to efficiency and long-term economic viability, Cakmak said.

The sector is moving toward circular models, including recycling and waste reduction, practices that are becoming essential to improving operations.

Designers double down

Anna Zinola, director of Istituto Marangoni in Riyadh, said rising oil prices are reinforcing, not reshaping, designers’ shift toward more conscious material choices.

Sustainability is embedded in the curriculum as a core approach guiding every design decision, she said.

Students are trained to balance cost, sustainability and consumer demand, while exploring material innovations that combine environmental and commercial goals.

Prices set to rise

Reports by McKinsey and Euratex expect global clothing prices to rise by 8% to 12% over the next year, as supply chain pressure persists and shipping costs remain elevated.