Touching the untouchables: The Saudi mega-project scheme has joined the growing number of delayed projects
Posted: 19 February 2008
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Saudi Arabia's Khursaniyah oilfield should be on stream within two months - later than originally planned - at a rate of 500,000 barrels per day, a Saudi Aramco official on Monday.
"Khursaniyah, with 500,000 barrels per day of Arabian Light crude ... will be available within two months," Reuters quoted Khalid al-Buainain , Saudi Aramco’s Vice President, Engineering Services, as saying in a speech at a London conference.
 An official at state-run Saudi Aramco had said in January the giant oilfield, previously scheduled to begin pumping at the end of last year, would come on stream in the first quarter of this year.
In spite of the delay, Saudi Arabia said it is still on track to hit an oil production target of 12 million barrels per day in 2009.
"All of these additions will enable us to expand our crude oil production capacity to 12 million bpd by the end of next year," Buainain said.
Overheating market
The Saudi mega-project scheme has joined the growing number of delayed projects in the region due to an overheating market.
The development of the 500,000 barrels per day (bpd) Khursaniyah oil production facility - which is a key part of Saudi Aramco’s drive to boost crude production from 10.8 to 12.5 million bpd by 2009 - has missed its December deadline. The development will now be finished in March 2008 or even later.
Aramco’s senior vice president for exploration and production, Amin Al Nasser, however said that other expansion projects through to 2009 remain on schedule.
"We are going up to 12 million bpd (oil production capacity) in 2009," said Nasser in a presentation to an energy conference in Riyadh, in January.
The announcement that some of Saudi’s massive projects would be delayed has startled some industry analysts. Until October 2007, Saudi Aramco - the world’s largest oil company - was notably the only oil company immune of delays, a trend that has been plaguing the industry for a few years now.
In fact in the first half of 2007, the company reported three of its mega projects are ahead of schedule: Khursaniya by half-year; Manifa by two years and Shaybah by two years.
The company said in a statement: “At a time when worldwide demand for drilling rigs is at historic highs, we increased our drilling rig count by 26% from 90 to 113 rigs. This total rig count comprised six exploration rigs and 75 development rigs (65 onshore and 10 offshore). In addition, we deployed 32 workover rigs (24 onshore and eight offshore). We drilled 368 new development and 13 exploration wells, and performed 206 re-entries and 136 work-overs.”
Time-table revised
With the Khursaniyah development slipping its December 2007 start-up date, observers say the company might have trouble delivering its ambitious program of upstream developments on time and in budget, and may point to delays creeping into other Saudi projects.
Saudi Aramco has now revised the timetable for some of its largest upcoming oil and gas projects. But the world’s top oil exporter consistently emphasises that it will be able to reach a production capacity of 12 million barrels per day by 2009 up from the current’s 10.8 million bpd.
Khursaniyah
The Khursaniyah field development which was due on line by December will now be finished in the first quarter of 2008. The Khursaniyah Program Facilities will process 500,000 bpd of Arabian Light crude oil and process one billion standard cubic feet per day of associated gas in a new grass roots gas plant. The output of the gas plant will include 280,000 bpd of condensate. The new facilities will also include new industrial support facilities.
According to International Oil Daily, late start-ups have been blamed on delays in completing the central gas-oil separation plant and crude processing facilities, which will not be finished until end-February.
The gas plant - which will process 1 billion cubic feet of associated gas from the Abu Hadriyah, Fadhili and Khursaniyah fields - will be operational by mid-July, Reuters, quoting al-Nasser, reported.
The facility is still waiting on delayed deliveries of equipment, which will not arrive until June, industry sources said. If oil is produced before the gas plant is operational, gas will have to be flared, industry sources said.
Manifa
The 900,000 bpd Manifa oilfield will start in September 2011, three months later than Aramco's initial schedule.
The extra Manifa oil output will mainly offset natural field declines elsewhere and will not boost production capacity significantly. Fields in Saudi have an average 6-8% annual decline rates, meaning the country needs around 700,000 bpd in additional capacity each year just to compensate for natural decline
Under the Manifa programme, Saudi Aramco plans to install central facilities at Manifa to process 900,000 barrels per day of Arabian Heavy crude oil. The Manifa Central Processing Facilities will include gas and oil separation, wet crude handling, gas compression, gas conditioning, crude oil stabilisation, produced water disposal and water injection facilities.
The Central Processing Facilities will be designed to process 900 mbcd of crude oil; approximately 120 million scfd of associated gas, 50 mbcd of hydrocarbon condensate will be produced as result of this crude increment.
The gas and condensate will be processed at Khursaniyah Gas Plant, and the crude will be transported to Ju‘aymah Terminal for export.
This programme is challenging primarily because of the location of the Manifa field in shallow water in the western Arabian Gulf, requiring a 41-kilometre asphalted causeway and 27 drilling pads in the shallow water. This shallow bay contains the most prolific shrimping area in Saudi Arabia, and precautions are being taken to maintain this vital resource.
The programme will include installation of four oil-producing offshore platforms with 10 producing and two evaluation wells each, and seven water-injection platforms with 10 water injectors each. Electric submersible pumps will provide artificial lift for production, which will be shipped without processing for multiphase flow transportation to the causeway and shore based central processing facilities.
Khurais
The planned 1.2 million bpd Khurais oilfield, expected to start production by mid-2009, is on track, according to Al Nasser. The Khurais programme will build facilities for 1.2 million bpd of Arabian Light crude through a new central processing facility, the largest of its kind in Saudi Arabia, near the town of Khurais.
A new gas plant will treat the associated gas, producing 70,000 bpd of condensate and 420 million cfd of gas.
The programme will also provide 4.5 million bpd of seawater for injection to support the increased production from Khurais and Ghawar fields. The seawater injection pipeline network will consist of 920 kilometres. In addition, the programme will also increase the existing East/West NGL pipeline capacity from 425,000 bpd to 555,000 bpd to manage the increased NGL produced at Khurais.
Other pipeline work includes all of the oil gathering and water injection distribution and sour gas to Shedgum Gas Plant. Infrastructure work includes an airstrip, residential facilities for up to 1,000 personnel, and an industrial complex to handle facility maintenance.
Shaybah and Nuayyim
A 250,000 bpd expansion at the Shaybah oilfield and the development of the 100,000 bpd Nuayyim field will add another 350,000 bpd of capacity by the end of 2008, Al Nasser said.
The Shaybah crude expansion programme is designed to increase Arabian Extra Light oil production capacity from the current 500,000 bpd to 750,000 bpd. The programme includes installation of a new gas/oil separation plants (GOSP) and expansion of the gas compression and injection facilities. A major oil pipeline loop will provide the increased oil transport capacity.
Saudi Arabia 's long-term goal is to further develop its lighter crude reserves, including the Shaybah field, located in the remote Empty Quarter area bordering the United Arab Emirates . In June 2005, the UAE said it wanted to amend a 1974 border pact which gave the Saudis rights to Shaybah, which lies 80 percent in Saudi territory and 20 percent in UAE. Shaybah contains an estimated 15.7 billion barrels (or higher) of premium grade 41.6o API sweet (nearly sulfur-free) Arab Extra Light crude oil, with production as of May 2005 at around 500,000 bpd.
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