State oil giant Saudi Aramco plans to build a new gas plant at al-Fadhili oilfield, which will have a processing capacity of 1 billion standard cubic feet per day of sour gas, three industry sources said.
Aramco has stepped up its search for gas to boost production that will help meet rising domestic fuel demand. It completed in 2012 the Karan gas project, the kingdom's first gas field to be developed which was not associated with an oil field.
The new plant will process gas coming from two fields; Khursaniyah and Hasbah.
Aramco already has oil and gas processing facilities in Khursaniyah, while Hasbah is one of the two non-associated offshore gas fields that will feed gas to the Wasit project which is currently under development.
The Fadhili plant, which is scheduled to be operational in 2018, will be able to deliver 520 million scfd of gas to the market, the sources said.
Aramco has already invited companies to bid for design and management contracts for the Fadhili project. The due date for bids are Aug. 4.
Saudi Aramco referred Reuters to the oil ministry which was not available for comment on the gas project.
The gas in Hasbah contains high levels of hydrogen sulphide, nitrogen and CO2. Gas with high levels of sulphur - also called sour gas - is tougher to process than other natural gas reserves.
Aramco said in its recently-issued 2012 Annual Review its exploration and appraisal efforts for unconventional gas continue and cited three areas; the Northwest of the kingdom, the Southern part of Ghawar, the world's largest onshore oilfield and in the Rub al-Khali, known as the Empty Quarter.
"A new onshore sour gas processing facility in the Fadhili and Khursaniyah area has the further advantage of opening up new opportunities to tap into the large undeveloped deep but sour gas reservoirs of Khursaniyah," said Sadad al-Husseini, a former top executive at Aramco and now president of Husseini Energy, an independent consulting firm.