28/09/2017 07:10 AST

State oil giant Saudi Aramco is expected to finish building facilities soon in the north of the kingdom that will allow it to produce shale gas for the first time, industry sources said.

The project, known as System A, involves gas processing facilities, wellheads and pipelines in Turaif which will feed the Waad Al Shamal phosphate mining project in the region.

"It is in the final stages, mechanical completion will happen soon," one of the sources said. A second source said the facilities would achieve mechanical completion in a month or two before production starts.

Saudi Aramco declined to comment. An update on the project in Aramco's 2016 annual report released in July said 55 million standard cubic feet of gas per day (scfd) would be delivered to industrial and power facilities at Waad Al Shamal by the end of 2017.

The search for natural gas is a top priority for Saudi Arabia as it struggles to keep pace with rapidly rising domestic demand for power. The kingdom also pledged to cut its carbon emissions and gas is cleaner than oil for power generation.

Saudi Aramco has said its gas production will double to 23 billion standard cubic feet per day in a decade, including 2 billion to 3 billion from shale.

Aramco is in the process of building a System B, which will be at least four times bigger than System A. It also has plans to build a System C but has yet to issue tenders for its construction.

Early projections estimated the shale gas intake of the Waad Al Shamal mining complex and power plant being built for Saudi mining firm Ma'aden would be 200 million cubic feet per day by 2018. The complex is expected to hit full capacity by 2019.


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