Identifier
Created
Classification
Origin
09DHAHRAN299
2009-12-28 12:25:00
UNCLASSIFIED
Consulate Dhahran
Cable title:  

MAJOR SAUDI OFFSHORE MANIFA FIELD COMPLETION DELAYED TWO

Tags:  EPET ENRG ECON PGOV SA 
pdf how-to read a cable
VZCZCXRO6355
PP RUEHDE
DE RUEHDH #0299/01 3621225
ZNR UUUUU ZZH
P R 281225Z DEC 09
FM AMCONSUL DHAHRAN
TO RUEHC/SECSTATE WASHDC PRIORITY 0342
INFO RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEHHH/OPEC COLLECTIVE
RUEHDH/AMCONSUL DHAHRAN 0453
UNCLAS SECTION 01 OF 02 DHAHRAN 000299 

SIPDIS

DEPT FOR EEB/ESC/IEC, NEA/ARP, AND S/CIEA
DOE FOR ELKIND,HEGBURG,PERSON

E.O. 12958: N/A
TAGS: EPET ENRG ECON PGOV SA
SUBJECT: MAJOR SAUDI OFFSHORE MANIFA FIELD COMPLETION DELAYED TWO
YEARS TO 2013; WASSIT GAS DEVELOPMENT PROGRAM CONTINUES

REF: RIYADH 958

DHAHRAN 00000299 001.2 OF 002


SUMMARY

-------



UNCLAS SECTION 01 OF 02 DHAHRAN 000299

SIPDIS

DEPT FOR EEB/ESC/IEC, NEA/ARP, AND S/CIEA
DOE FOR ELKIND,HEGBURG,PERSON

E.O. 12958: N/A
TAGS: EPET ENRG ECON PGOV SA
SUBJECT: MAJOR SAUDI OFFSHORE MANIFA FIELD COMPLETION DELAYED TWO
YEARS TO 2013; WASSIT GAS DEVELOPMENT PROGRAM CONTINUES

REF: RIYADH 958

DHAHRAN 00000299 001.2 OF 002


SUMMARY

--------------




1. (U) Citing weak global demand, Saudi Aramco pushed back the
tentative completion date of the last giant Saudi oilfield in
its expansion plans by at least two years. Meanwhile, Saudi
Arabia is expected to announce its final plans to build the
Kingdom's largest gas plant ever whose purpose is to supply
domestic utilities and some industries. Saudi Aramco is
pursuing practical carbon management by launching a pilot Carbon
Capture and Sequestration (CCS) project expected to come on line
in 2013, and is also looking into using CO2 for enhanced oil
recovery. End Summary.



Manifa Completion Delayed Two Years

--------------




2. (U) Saudi Aramco pushed back the tentative completion date of
the last giant Saudi oilfield in its expansion plans by at least
two years. The Manifa Arabian heavy crude program is an
offshore oil production development. Widely considered to be
the largest single offshore crude oil project in Saudi Aramco's
history, Manifa will comprise 27 man-made islands connected by
41 km of causeway. Previously due to come online by 2011, the
900,000 barrels per day Manifa project is now expected to come
online in 2013 (to include 90,000 million cubic feet/day of
associated gas and 65,000 bpd of condensate). Saudi Aramco has
previously noted that Manifa is intended to compensate for
declining output in other fields and not as a means to boost
capacity. Press reports quote Aramco CEO Khalid al-Falih as
saying that Manifa will begin production in 2013 and will be
completed, at full output, in 2015.




3. (U) The price tag for Manifa has increased significantly from
an earlier 2009 estimate totaling $7 billion. Saudi Aramco
places the cost of developing the Manifa heavy crude field at
nearly $16 billion, about the same as before last year's drop in
construction costs. Saudi Aramco made the investment decision
on Manifa, said Saudi Aramco CEO Khalid Al-Falih, when oil
prices were above $70/bbl and demand prospects were strong.

After prices tumbled to around $35/bbl, he added in a December 7
speech, "costs did not proportionally decrease, clouding the
robustness of the investment." Al-Falih told reporters on
December 12 that weak global demand is the reason Aramco delayed
the Manifa heavy-oil field development.




4. (U) Also included in the project is the construction of four
on- and offshore pipeline networks, plus a water supply system
intended by Aramco to inject around 1.35 million barrels of
aquifer water daily into the oil reservoir in order to maintain
the required pressure for optimum crude oil production. Much of
the heavy crude oil will be shipped to a new refinery due to be
built across the Arabian Peninsula in Yanbu, on the Red Sea
north of Jeddah (a joint venture of Saudi Aramco and
ConocoPhillips). Reuters reports that Aramco and ConocoPhillips
have brought forward the deadline to January 26 for bids to
build the 400,000 bpd oil refinery that is intended to produce
ultra-low sulfur oil for the U.S. market (reftel).



WGDP Gas Development Megaproject Continues

--------------




5. (U) The CEO of Saudi Aramco, Khalid al-Falih, said in
November 2009 that Saudi Arabia would soon announce its final
plans to build the Kingdom's largest gas plant ever to supply
domestic utilities and some industries. However, nearly one
month later, Saudi Aramco has provided few additional public
details regarding the new Wasit Gas Development Program (WGDP)
which is expected to process more than 1.8 billion cubic feet
per day (cfd) of gas. SNC-Lavalin, a leading engineering and

DHAHRAN 00000299 002.2 OF 002


construction group headquartered in Canada, announced in
September that it was awarded the front-end engineering and
design (FEED) and project services contracts by Saudi Aramco.
According to SNC-Lavalin press releases, the WGDP will provide
for the production and processing of up to 2.5 billion cfd of
gas from Aribiyah and Hasbah offshore non-associated sour gas
fields to meet future Saudi demand. The contract is for 5 years
and was expected to begin by October 1, 2009.




6. (U) The WGDP is split into several projects that include
building gas processing facilities, two offshore gas platforms,
one tie-in platform, as well as subsea power and communication
links and pipelines. Supplies from the gas plant will not be
used as feedstock for the growing petrochemical sector. Saudi
Arabia is short of gas to meet demand for power and desalination
plants and industry, as energy consumption has risen
considerably in recent years. Some estimates place KSA gas
demand growth at 7 percent per annum.



Environment: Carbon Capture and Sequestration

-------------- -




7. (U) Saudi Aramco is developing a pilot Carbon Capture and
Sequestration (CCS) project expected to come on line in 2013,
and is also looking into using CO2 for enhanced oil recovery.
Prince Abdulaziz bin Salman told Energy Ministers at an October
CCS summit in London that a CO2 demonstration project is planned
for 2013 and is expected to inject 40 million standard cubic
feet per day of CO2 in an area already flooded by water in
Ghawar, the world's largest oil field. Efforts in this field
are nascent, but Saudi Aramco's Chief Petroleum Engineer
recently stressed the importance of practical carbon management
at a presentation to Deputy Secretary of Energy Poneman during
his December visit to KSA. Consulate General Dhahran will
continue tracking Aramco developments in this field.
CG: JKENNY