The development of unconventional gas reserves in Al-Jafurah field will catapult Saudi Arabia to the forefront of global gas producers and help the Kingdom in its plans to diversify the economy. Saudi Arabia has one of the world’s largest proven conventional gas reserves of about 300 trillion cubic feet, and unconventional gas reserves are estimated at more than 600 trillion cubic feet. Unconventional gas refers to reserves requiring advanced extraction methods, such as those used in the shale gas industry. Al-Jafurah is southeast of Ghawar, the world’s largest conventional oilfield. The Al-Jafurah deposits are estimated to hold 200 trillion cubic feet of wet gas, and the phased development of the field is expected to gradually increase production to 2.2 trillion cubic feet by 2036, upon completion. Development of the field over 22 years will provide the Kingdom with an annual net income of $8.6 billion and contribute $20 billion to the Kingdom’s gross domestic product per year. The field is expected to produce 130,000 barrels per day of ethane and 500,000 bpd of gas liquids and condensates. The development of the gas field represents a strategic investment opportunity that will pay off in the years to come and help boost the economic growth of the country. It will also help achieve the Kingdom’s goal of cutting carbon emissions by replacing oil and its derivatives with gas for power generation. The question here is what are the available gas markets that will benefit from the production of this gigantic gas field? There are several scenarios available, one of which involves exporting gas to the international market after converting it from gas in its natural state to gas in the state of a cooled liquid, or liquefied natural gas. But does the international market need additional supplies of liquefied natural gas amid high competition in the global gas markets? The second would be to utilize this gas locally in the Kingdom to cover the domestic demand needed for power generation, and we know that in 2019, gas constituted about 65 percent of the Kingdom’s total energy mix. There is also a great need for this gas in the petrochemical industry, and it will further help to build new petrochemical plants. The volume of natural gas in its liquid state is about 600 times smaller than its volume in its gaseous state. Faisal Faeq The third scenario is exporting natural gas regionally to neighboring countries via gas pipelines. The eight countries neighboring the Kingdom, except Qatar, are all very thirsty for gas supplies, especially Oman and Kuwait. Natural gas pipelines do not require expensive infrastructure for the export of liquefied natural gas. Transportation of natural gas through pipelines also has a strong economic advantage in terms of price and logistical advantages in terms of transportation. In addition to meeting their massive gas requirement, it will contribute to improving the position of these countries in addressing carbon neutrality. The volume of natural gas in its liquid state is about 600 times smaller than its volume in its gaseous state. This process makes it possible to transport natural gas to places pipelines do not reach. Liquefying natural gas is a way to move natural gas long distances when pipeline transport is not feasible. Markets that are too far away from producing regions to be connected directly to pipelines have access to natural gas because of liquefied natural gas. In its compact liquid form, natural gas can be shipped in special tankers to terminals around the world. At these terminals, the liquefied natural gas is returned to its gaseous state and transported by pipeline to distribution companies, industrial consumers, and power plants. As for the cost of these gas pipeline networks, it will be justified by the great advantage of such pipelines in the region. For example, the 1,225-km Russian Nord Stream 2 pipeline — which took five years to complete, is built offshore under the Baltic Sea, and crosses the water borders of Estonia, Latvia, Lithuania, and Poland to reach northern Germany — cost only $11 billion. This is a relatively modest cost in the world of the oil and gas industry. Russia has the largest reserves of natural gas in the world, and Russian gas is mostly exported to Europe via onshore gas pipelines as the main supplier of gas to Europe. Nord Stream 2 is Russia’s first offshore gas pipeline, which will double the country’s gas exports to Germany and increase Europe’s dependence on Russia. Investments to develop the Saudi gas pipeline to neighboring countries are well within reach, and the gas pipeline can start from the Kingdom in parallel with the development work on Al-Jafurah gas project. Many neighboring countries will welcome participation in this pipeline and may be encouraged to invest in it because of its positive impact on their economies. The feasibility of the Saudi pipeline project for gas that is sold before it is produced will intuitively attract foreign investments. • Faisal Faeq is an energy adviser and columnist. He formerly worked with Saudi Aramco and OPEC Secretariat. Twitter: @FaisalFaeq Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News" point-of-view