Saudi Aramco started producing gas last week from Karan, its first non-associated gas field, two industry sources said. Sources did not say when the field – a key part of Saudi's plan to increase gas production to reduce dependency on oil - would reach its summer 2011 target production of 400-450 million cubic feet per day (cfd) of gas. First gas started flowing from the field on schedule last week, said one source who declined to be identified. New gas fields typically increase production gradually over weeks as engineers test equipment. Aramco, which has focused on new gas projects since completing a massive crude expansion plan in 2009, said in its 2010 annual review that Karan should reach a full production capacity of 1.8 billion cfd in April 2013, in time for the peak power demand period of May to September. "When fully operational in 2012, the project will produce 1.8 billion scfd of raw gas," Aramco said in its annual review. Khalid Al-Falih, the CEO of Saudi Aramco, said recently that Saudi Arabia has large reserves of unconventional gas. South Korea's Hyundai Engineering & Construction and Britain's Petrofac are working on onshore parts of the project, while US-based McDermott International is building offshore platforms and a subsea pipeline to carry sour gas from Karan for processing at the Khursaniyah plant onshore. Saudi Arabia is focusing on tapping new sources of gas that are not tied to oil production to help meet seasonal demand for electricity and rising petrochemical feedstock needs. Aramco plans to probe as yet unexploited areas such as the Red Sea for more oil and gas. It is looking at unconventional tight and shale gas sources, focusing initially on the northwest of the country and around Ghawar, the world's biggest oil field, where gas infrastructure is already in place and Aramco hopes to identify specific wells in 2011. Aramco is now building two major gas projects, Wasit and Shaybah natural gas liquids, which should both be completed in 2014, and is looking at new offshore prospects including deep-water fields. Wasit, together with the Khursaniyah and Karan gas plants, should help Saudi Arabia reach its targeted production increase of raw gas – unprocessed natural gas - to 15.5 billion cfd by 2015 from 10.2 billion cfd in 2010.
