Saudi Arabia Case Study Illustrates Road to Zero Routine Gas Flaring

Abstract

_ This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper IPTC 21182, “The Road to Zero Routine Gas Flaring: A Case Study From Saudi Arabia,” by Majed Alsuwailem, KAPSARC. The paper has not been peer reviewed. Copyright 2021 International Petroleum Technology Conference. Reproduced by permission. _ The complete paper discusses Saudi Arabia’s progress in gas flaring, the measures the government has taken, and how operators have adapted. It also identifies many lessons learned and technological solutions that could be scaled up on a national or a corporate level to reduce gas flaring to achieve zero routine flaring targets, especially in cases where the state owns hydrocarbon assets and leases them to private operators. History of Gas Flaring in Saudi Arabia Following the discovery in 1948 of Ghawar, Saudi Arabia’s largest oil field, oil production in the country increased and more associated gas was produced and flared. The national oil company, Saudi Aramco, had no interest in capturing gas produced from its oil operations. No local or regional market for it existed, and exporting the gas would have required substantial infrastructure investments. This coincided with periods of low crude oil prices that made gas projects uneconomical. However, as the 1960s and ’70s passed, gas came to be increasingly regarded as an essential part of a broader attempt to diversify the Saudi economy. This, in return, allowed the creation of jobs in new frontiers, including the refining and petrochemical industries. In the early 1970s, the Saudi Ministry of Petroleum and Minerals contracted the Texas Eastern Corporation to conduct a technical and economic feasibility study. It evaluated the benefits of establishing a massive refining and petrochemical industry in the city of Jubail on the Arabian Gulf and Yanbu on the Red Sea, with gas as an important feedstock. The study required major capital expenditures on midstream oil operations. Saudi Aramco, on the other hand, proposed exploiting associated gas to generate electricity. Because the price of oil did not exceed $3/bbl before the 1970s, the Saudi government opted for the first option. Saudi Aramco, however, only foresaw an opportunity in this development if the government contributed major capital to the midstream, resulting in a positive outcome for both the stakeholders and the operator, which turned out to be the case. Master Gas System (MGS) The government gave Saudi Aramco a contract to establish the $12 billion MGS to capture, process, and use gas as fuel and feedstock for the petrochemical plants. Most of this project was paid for by the government. By the fall of 1982, the key components of the MGS (gas-gathering and -processing facilities and pipelines) were fully operational. The MGS saved 4.2 billion scf of gas from being flared, which prevented 80 million tonnes of carbon dioxide from being emitted into the atmosphere annually. Over time, the MGS has been expanded as more oil and nonassociated gas fields have been placed onstream and as demand has risen for dry gas in the power sector. By 2018, the MGS had gathered almost 3.5 trillion ft3/yr and is one of the world’s largest single hydrocarbon networks. It includes 4,000 km of pipelines, 50 gas/oil separation plants (GOSPs), seven gas plants, and two natural gas/liquid units.