(MENAFN- The Arabian Post) Arabian Post Staff -Dubai

Saudi energy giant Saudi Aramco has begun output from the first phase of its vast Jafurah gas field, signalling a major milestone in the Kingdom's shift toward natural gas. The project, valued at around $100 billion, has an initial production capacity of 450 million cubic feet per day, according to the Saudi Finance Ministry's 2026 budget statement.

The field holds an estimated 229 trillion standard cubic feet of raw gas along with 75 billion stock tank barrels of condensate-making Jafurah the largest non-associated gas development in Saudi Arabia and among the largest shale-gas plays outside the United States.

Completion of the first development phase allows Aramco to begin supplying sales gas domestically. The company plans to ramp production gradually and aims to reach a sustainable output of 2 billion cubic feet per day by 2030.

To support its gas-processing infrastructure, Aramco earlier sealed an $11 billion lease-and-leaseback agreement with a consortium led by Global Infrastructure Partners, part of BlackRock. Under the deal, a newly formed subsidiary, Jafurah Midstream Gas Company, will lease the processing and fractionation facilities - which Aramco will then lease back for a 20-year period. Aramco retains majority ownership with a 51% stake, while the investor group holds 49%. The transaction is designed to inject capital without constraining production volumes.

Aramco's move reflects a broader strategic shift. By ramping up gas production, the company aims to reduce domestic reliance on crude oil for power generation - thereby freeing more crude for export. Gas from Jafurah is expected not only to meet domestic power and utility needs but also to provide feedstock for petrochemicals, hydrogen, and potentially emerging sectors such as AI data-centres.

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Analysts view Jafurah as a potential game-changer for both Saudi Arabia and global gas markets. With reserves comparable to major U. S. shale plays and a projected daily output of 2 bcf by 2030, the project could make Saudi Arabia a more prominent natural-gas exporter or LNG player - a significant rebalancing from its traditional role as an oil-dominated supplier.

Through this transformation, Aramco underlines its long-term aim of reinventing its energy portfolio - aligning with efforts to diversify the country's economy and meet shifting global demand patterns.

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