The Financial Times recently reported that Saudi Aramco, the world's largest oil producer, is shifting its focus to natural gas, attempting to build an energy backbone for data centers, emerging industries, and rapidly developing cities.
The Jaffra gas field, one of the world's largest shale gas basins and a cornerstone of Saudi Arabia's foray into the shale gas industry, is scheduled to begin production in the coming weeks. The field contains approximately 230 trillion cubic feet of natural gas and 75 billion barrels of oil, and is also rich in ethane, a key raw material for plastics manufacturing.
Saudi Arabia believes its abundant, low-cost natural gas resources can help attract heavy industry and manufacturing to new economic zones. Ethane produced at Jaffra will supply the country's petrochemical industry, while surplus natural gas can be used to produce low-carbon hydrogen or exported as liquefied natural gas.
In the Middle East, Saudi Arabia, Qatar, and the UAE are leading a natural gas race. Data from consulting firm Rystad Energy shows that Qatar's natural gas production is roughly twice that of Saudi Arabia. While Saudi Arabia currently generates most of its electricity from burning crude oil, it is building a number of new gas-fired power plants, aiming for an equal distribution of natural gas and renewable energy by 2030.
Rystad analyst Aditya Saraswat acknowledged the potential of the Jaffra gas field, but questioned Saudi Arabia's ability to absorb all the new production. He pointed out that Saudi Arabia has not yet begun construction of liquefied natural gas export terminals and speculated that Saudi Aramco may have to reduce production from other gas fields to make room for the Jaffra field.
