Al-Jafurah: Saudi Arabia's Largest Shale Gas Project and Its Economic Impact

Al-Jafurah is an unconventional natural gas field located in the Eastern Province of Saudi Arabia, between Al-Ahsa and Al-Qatif, covering an area of over 55,000 square kilometers. It is the largest non-associated gas field in Saudi Arabia and the second largest outside the United States. The field was discovered in the late 1990s, and Saudi Aramco has been intensively developing it since 2015 as part of the Unconventional Gas Program (Iktifa). Al-Jafurah is rich in natural gas and light condensates, and its significance lies in its independence from oil production, making it a strategic element for securing gas supplies independently. With its massive gas and condensate reserves, Al-Jafurah has become a central focus in the Kingdom's plans to achieve self-sufficiency in gas, reduce dependence on imports, and develop local industries that primarily rely on clean energy and gas.

In February 2024, Aramco announced the addition of 15 trillion cubic feet of gas to the proven reserves in Al-Jafurah, bringing the total to approximately 110 trillion cubic feet of raw gas and over 5 billion barrels of condensate. The potential reserve estimates are much larger, with some sources estimating over 200 trillion cubic feet of gas and 19-20 billion barrels of oil condensates. This stock compares to current local consumption, which is about 10-12 trillion cubic feet annually, meaning that Al-Jafurah could meet the Kingdom's gas needs for decades to come. The startup of the core processing facilities in 2024 will have a capacity of 1.5-2 billion cubic feet per day, with plans to increase capacity to 2.5 billion in 2025, and then to 4-5 billion by the end of the decade. These figures reflect the scale of the project and its expected impact on the national energy balance.

Saudi Aramco launched the Iktifa program in 2015 as a national strategy to develop unconventional gas fields, focusing on Al-Jafurah as a key hub. The program aims to increase local gas production to three or four times the levels of 2015, while providing an attractive investment environment for local and international investors. The development includes horizontal drilling and hydraulic fracturing technologies, as well as expanding gathering and processing networks. Through Iktifa, Aramco is working to support local industries and reduce dependence on imported gas, in addition to creating massive investment opportunities in infrastructure, petrochemicals, and renewable energy projects linked to gas production.

Saudi Aramco, the national energy company, fully owns and develops the Al-Jafurah project. Although part of Aramco is listed on the Saudi stock market, Al-Jafurah is not an independently traded entity. Aramco aims to maximize the use of modern technology and international partnerships, having signed massive contracts with global companies such as Global Infrastructure Partners, and executed multi-billion dollar contracts to build gas processing and liquefaction facilities. Aramco relies on global best practices for the development of Al-Jafurah, with a strict commitment to environmental safety and sustainability standards, and works to enhance the local supply chain by involving Saudi and global contractors at all stages of the project.

Al-Jafurah represents one of the largest investment projects in the history of the Kingdom, with announced costs exceeding $35 billion by mid-2025, with estimates that total investments could reach $100-120 billion by 2030. In June 2024, Aramco issued tenders worth $25 billion for the second phase of the project, including the construction of processing and liquefaction facilities under the Master Gas System III. It also secured financing deals with international alliances led by Global Infrastructure Partners, worth several billion dollars. These massive investments reflect confidence in the economic feasibility of the project and open the door to global and local partnerships in the Saudi energy sector.

The first phase of production at Al-Jafurah began in late 2024, with processing facilities operating at an initial capacity of between 1.5 and 2 billion cubic feet of gas per day. The field's development operations rely on advanced technologies such as horizontal drilling and hydraulic fracturing, allowing for gas extraction from deep rock formations. Gas is collected through a central pipeline network that sends production to advanced processing stations, where gas is separated from condensates and either liquefied or pumped directly into the national gas network. The operational capacity is planned to gradually double to reach 4-5 billion cubic feet per day by the end of the decade, making the project one of the pillars of energy security in the Kingdom.

The impact of Al-Jafurah extends to most sectors of the Saudi economy, as it directly contributes to reducing the bill for gas and liquid fuel imports and provides the necessary gas for local industries. Increased availability of competitively priced gas enhances the competitiveness of energy-intensive industries such as cement, petrochemicals, and fertilizers. The project also provides massive opportunities for contracting and construction companies, as well as banks financing infrastructure projects. Economists expect that every dollar invested in Al-Jafurah will yield an economic return of between four and five times in the medium to long term, with additional support for local growth and the creation of new jobs in the energy and manufacturing sectors.

Although Al-Jafurah is not a listed company in the financial market, its indirect impact is clear on listed industrial companies, particularly cement companies like Hail Cement (stock symbol: 3001 on Tadawul). Cement factories are among the largest consumers of energy, and with the start of pumping local gas from Al-Jafurah at prices lower than imported gas, production costs are expected to decrease, increasing profit margins in the sector. The project also supports Aramco's strategic plans to reduce dependence on liquid fuel for power generation, enhancing the ability of companies like Hail Cement to meet local demand and compete for government contracts. For more on the performance of Hail Cement shares, you can visit the stock page 3001.

Al-Jafurah falls within the renewable energy sector in Saudi Arabia, representing a qualitative shift from dependence on oil to expanding unconventional gas production. The project contributes to reducing carbon emissions compared to liquid fuels and is a cleaner, more efficient alternative for power plants and manufacturing industries. Competitively, there is no other shale gas field in the Kingdom of Al-Jafurah's size, giving it a unique position in the national energy strategy. Compared to global projects, Al-Jafurah is characterized by investment security and significant government support, with massive investments in infrastructure and modern technologies.

The cement and construction sector is one of the most benefitted from Al-Jafurah, as cement factories heavily rely on natural gas for combustion and operation processes. The availability of local gas at competitive prices reduces production costs and supports the profitability of companies amid local and regional competition. Additionally, infrastructure projects linked to Al-Jafurah provide further opportunities for cement companies in government and private contracts. At the same time, lower gas costs may stimulate housing and construction projects, increasing demand for cement and enhancing companies' ability to expand, such as Hail Cement (3001) and other listed companies.

At the local level, there is no competitor to Al-Jafurah's size in the shale gas sector, but traditional fields in Saudi Arabia still form part of the supply equation. Regionally, Al-Jafurah competes with massive projects such as the North Field expansions in Qatar and gas projects in Iran. Globally, the United States, Canada, and Argentina lead in unconventional gas, but Al-Jafurah stands out with a stable investment environment and transparent regulatory climate. The support of the Saudi government and Vision 2030 gives the project a competitive edge both locally and internationally.

The development of Al-Jafurah relies on hydraulic fracturing and horizontal drilling technologies, which are advanced techniques that allow for efficient gas extraction from deep rock formations. These methods enable the extraction of large quantities of gas with high efficiency while controlling environmental impacts through advanced monitoring systems and leak reduction technologies. Aramco adheres to the highest environmental safety standards and engages global companies specializing in drilling and processing services to ensure sustainable production and minimize environmental impact, while leveraging leading global experiences in this field.

Investments in Al-Jafurah have exceeded $35 billion to date, with expectations that they will reach $100-120 billion by 2030. Despite the massive costs, economic studies indicate that the long-term return is high, with the project expected to achieve an internal rate of return exceeding 10% annually due to lower gas extraction costs compared to liquid fuels. Additionally, increasing reliance on local gas saves the state billions of dollars annually that were previously spent on gas and fuel imports. Furthermore, the gas surplus allows for the export of petrochemical products and increases state revenues from the energy sector.

Al-Jafurah represents an advanced step in the Kingdom's efforts to reduce carbon emissions, as replacing high-carbon liquid fuels with gas in power plants and industry reduces diesel and high-carbon fuel consumption. Aramco is also committed to applying the latest environmental technologies in production operations, including leak and water pollution monitoring systems. Despite concerns about hydraulic fracturing techniques, official entities confirm that the project adheres to the highest safety and environmental monitoring standards, with programs for water recycling and reducing long-term environmental impact.

The period between 2024 and 2025 witnessed a series of significant developments in the Al-Jafurah project, most notably the addition of massive gas and condensate reserves and the commencement of initial production facilities. Aramco also signed multi-billion dollar contracts with global companies to develop processing and liquefaction facilities as part of the project's second phase. In November 2025, Aramco announced a financing partnership with Global Infrastructure Partners to manage part of the gas transport and processing assets. Additionally, the Saudi financial market saw notable reactions to news of the project, with shares of contracting and energy companies rising following the announcement of new contracts. These developments reflect Al-Jafurah's continued role as a central pillar in the future of Saudi energy and economy.