Saudis take first steps to exploit shale gas

Saudi Arabia is taking the first steps towards its own shale gas revolution, says the kingdom's oil minister.

Saudi Arabia is taking first steps to explore its shale gas potential, a development that could see the kingdom replicate the energy revolution that has led to a dramatic increase in supply in North America.

The oil minister Ali Al Naimi, said the country's national oil company, Saudi Aramco, will dig up to seven test wells this year.

The world's biggest exporter is struggling to meet domestic demand or natural gas, the most common feedstock in its power plants, and has been forced to expand its production of conventional gas.

Vast reservoirs of natural gas stuck in shale rock formation have been prospected in the northwest of the country, and could help to stave off a shortage of the commodity.

"We know where the areas are," Mr Al Naimi said yesterday. "We have rough estimates of over 600 trillion cubic feet of unconventional and shale gas so the potential is very huge and we plan to exploit it."

The American oilfield services company Baker Hughes puts Saudi reserves of potentially recoverable shale gas at 645 trillion cubic feet, which would make them the world's fifth largest deposits.

A shale boom in North America has cut gas prices, boosting the economies of Canada and the United States and opening up export opportunities.

Saudi Aramco is already exploring the kingdom's east and the vast deserts of the Empty Quarter for sulfur-rich sour gas and other unconventional gas.

Saudi Arabia's conventional gas resources are estimated at 282.6 trillion cubic feet .

The first shale test wells are likely to lead to a more comprehensive exploration programme that will assess the recoverable reserves.

Experts say that the volume of shale gas resources make it likely that they will be tapped in future.

"It is very probable, if not inevitable, its just about timing. Right now the kingdom is developing more conventional resources," said Sadad Al Husseini, a former executive vice president for upstream operations at Saudi Aramco.

"There could be something coming out of the ground in five years. But I don't think the urgency is there unless the resources are really encouraging."

The current resource estimates for shale gas differ from the amount of gas that can be extracted from the rock formations, added Mr Al Husseini.

"Usually you recover less than 5 per cent."

Production of shale gas in Saudi Arabia will also be hampered by the vast amount of water required to for hydraulic fracturing, or fracking, the technique that is used to extract the gas from the rock.