Case Study : Saudiaramco Gas Project
PMI® Case Study
SAUDI ARAMCO HARADH GAS PROJECT:
2004 PMI Project of the Year
Saudi Arabia’s growing economy needs energy to supply the domestic industry and the kingdom’s national electric power generating plants.
While oil is abundant, greater utilization of Saudi Arabia’s natural gas resources for these domestic uses would release oil for export.
Background
In 2000, Saudi Arabia’s total gas sales totaled 3.9 billion standard cubic feet per day (SCFD), but were forecast to grow to 8.6 billion
SCFD by 2009. New production capacity was needed fast. In 1999,
Saudi Aramco gave the green light for an estimated $2 billion investment in the Haradh Gas Project.
Challenges
Haradh would cover most of the eastern province of Saudi Arabia, and send gas to customers in central Saudi Arabia and the capital of
Riyadh, 300 kilometers away. The site of the processing plant was barren desert, 180 kilometers from the nearest outpost of civilization, and 10 kilometers from the nearest road. Summer temperatures often reach 52 degrees Celsius.
The plant needed raw material: 87 gas wells would tap the resource from the desert, and 680 kilometers of pipeline would bring it to the plant from three different fields. Turning raw gas into a commercial product also requires high voltage electricity, which involved constructing substations and running hundreds of kilometers of lines out to the gas fields.
Perhaps most important, the plant needed people. A permanent city—a virtual oasis in the desert—would provide housing and recreation for the 1,000 employees and contractors. Due to its remote location, people and supplies would have to be airlifted, requiring construction of an 8,000-foot airstrip qualified to land a Boeing 737.
Finally, the processed gas and liquid hydrocarbons would reach the market via 395 kilometers of cross-country pipeline.
Solutions
Company executives cite the original contracting document, which defined the mix of contracts best
SAUDI ARAMCO HARADH GAS PROJECT:
2004 PMI Project of the Year
Saudi Arabia’s growing economy needs energy to supply the domestic industry and the kingdom’s national electric power generating plants.
While oil is abundant, greater utilization of Saudi Arabia’s natural gas resources for these domestic uses would release oil for export.
Background
In 2000, Saudi Arabia’s total gas sales totaled 3.9 billion standard cubic feet per day (SCFD), but were forecast to grow to 8.6 billion
SCFD by 2009. New production capacity was needed fast. In 1999,
Saudi Aramco gave the green light for an estimated $2 billion investment in the Haradh Gas Project.
Challenges
Haradh would cover most of the eastern province of Saudi Arabia, and send gas to customers in central Saudi Arabia and the capital of
Riyadh, 300 kilometers away. The site of the processing plant was barren desert, 180 kilometers from the nearest outpost of civilization, and 10 kilometers from the nearest road. Summer temperatures often reach 52 degrees Celsius.
The plant needed raw material: 87 gas wells would tap the resource from the desert, and 680 kilometers of pipeline would bring it to the plant from three different fields. Turning raw gas into a commercial product also requires high voltage electricity, which involved constructing substations and running hundreds of kilometers of lines out to the gas fields.
Perhaps most important, the plant needed people. A permanent city—a virtual oasis in the desert—would provide housing and recreation for the 1,000 employees and contractors. Due to its remote location, people and supplies would have to be airlifted, requiring construction of an 8,000-foot airstrip qualified to land a Boeing 737.
Finally, the processed gas and liquid hydrocarbons would reach the market via 395 kilometers of cross-country pipeline.
Solutions
Company executives cite the original contracting document, which defined the mix of contracts best