King Salman inaugurates new mining and industrial hub Wa'ad Al Shamal

Cover picture of the Arabian Sun publication 45/2018

The inauguration of the Wa’ad Al Shammal mining and industrial project in northern Saudi Arabia today by the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud marked a major milestone in Saudi Aramco’s long term strategy to increase gas supply in support of the Kingdom’s economic diversification program to generate growth in new sectors. The inauguration was witnessed by royal dignitaries, ministers, officials and corporate sector leaders with a delegation from Saudi Aramco led by President and CEO Amin Nasser.

Wa’ad Al Shamal, or “Northern Promise” will be a new industrial city located 30 km west of Turaif, which is set to become a major mining hub. Spread over 440 square kilometers, and already hosting phosphate processing facilities, Wa’ad Al Shamal will increase economic and industrial activity in the northern region of Saudi Arabia. Developing new mining and mineral activities, especially phosphates, and downstream value added industries such as glass and plastic manufacturing, it is estimated that Wa’ad Al Shamal will generate SR24 billion from non-oil sectors and contribute 3% to the Kingdom’s Gross Domestic Product. About 30,000 jobs are expected to be created for qualified Saudi youth, especially those from the region.

Saudi Aramco President and CEO Amin H. Nasser said: “Our celebration today the inauguration of Wa’ad Al Shamal by the Custodian of the Two Holy Mosques King Salman represents an important advancement and a key milestone in our journey toward diversifying the economy and in making Saudi Vision 2030 a reality. The Northern Promise can be a prime catalyst in creating transformational industries that can generate more growth and more value from niche manufacturing sectors such as manufacturing glass, glass fibers, plastics and solar panels.”

Delivering on its promise to fuel industries in the northern part of the Kingdom, as it is presently doing in developing the Jazan Economic City in southwestern Saudi Arabia, Saudi Aramco commenced commercial production of unconventional gas in the North Arabia Field in May 2018, supplying approximately 55 million standard cubic feet per day (MMscfd) to a local power plant. The gas production will ramp up to 190 MMscfd toward the end of 2018 to meet customers’ needs.

Nasser added: “What we see now at Wa’ad Al Shamal city is the productive outcome of close collaboration between government sectors, agencies and leading national companies. I am proud of Saudi Aramco’s role in this achievement, making an investment of more than SR 10 billion to supply the required energy feedstock to the city and its projects.”

Wa’ad Al Shamal is 1,000 kilometers away from Riyadh and supplying the city with competitive gas feedstock was initially deemed as complex and costly due to its terrain and geography. However, Saudi Aramco came up with a creative and efficient solutions to explore and drill for gas resources in the region, specifically unconventional gas.

With foresight to foster human resources and support the national goal of creating additional job opportunities in the northern part of the Kingdom via the establishment of Wa’ad Al Shamal, Saudi Aramco reached out to schools in nearby cities and villages to promote upcoming opportunities with the company for high school graduates, such as the Apprenticeship Program for Non-Employees. The prospect for a 100% Saudi workforce, primarily from the North, is very high with the upcoming employment opportunities in line with the region’s growth.

Commercial production of natural gas signifies the first milestone in Saudi Aramco’s implementation phase of the unconventional resources extraction program. “Building on three crucial pillars of a sound de-risking strategy, a fit-for-purpose business model, and the building of capabilities in people and technology, the company’s Unconventional Resources (UR) organization has made significant achievements over the past few years. The gas supply to support Wa’ad Al Shamal industrial projects will also help offset the increase in liquid burning for electricity in the area,” said Khalid M. Al Abdulqader, Saudi Aramco’s general manager of Unconventional Resources.

The UR organization has completed drilling wells, installing more than 300 kilometers of pipelines, and building one surface processing facility (SPF) along with associated infrastructure, while the remaining four SPFs will come online by the year-end of 2018. Producing unconventional gas near Turaif will replace the burning of hydrocarbons for electricity generation. The result will be a reduction in carbon emissions while saving hydrocarbons for export to obtain higher value. The project’s best practices and experiences will benefit teams developing the remaining unconventional resources in the Kingdom, including the South Ghawar and Jafurah fields. In line with Saudi Vision 2030, these endeavors will contribute to increase the Kingdom’s natural gas production.

Saudi Aramco’s unconventional gas experience in North Arabia has been unique. Technology has been adapted to take into consideration the local environment, and the business model assisted in addressing the crucial aspect of cross-function collaboration. Thanks to world-leading, cutting-edge technology, Saudi Aramco is able to increase the chances of finding gas, while reducing the drilling and well delivery time, as well as costs, by 70%.

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