Published by Global Banking & Finance Review®
Posted on February 27, 2026
7 min readLast updated: April 2, 2026
Add as preferred source on GoogleSaudi Aramco has begun initial output from its Jafurah unconventional gas project, aiming to scale production through 2030 and reduce domestic crude burning for power—freeing more oil for export. The $100B+ shale-style development could add $12–$15B in incremental operating cash flow by 2030 as Aram
By Yousef Saba
DUBAI, Feb 27 (Reuters) - The shale revolution that made the United States the world's top oil producer is taking shape in the Arabian Desert.
Deep in the sands southeast of Saudi Arabia's giant Ghawar oilfield, state oil company Aramco is pushing ahead with a natural gas megaproject that could boost the kingdom’s revenues by billions of dollars in the coming years.
It has brought in U.S. and Chinese firms like Halliburton and Sinopec to deploy advanced machinery - including 'walking rigs', towering structures capable of moving short distances without dismantling and reassembling - to speed up drilling and well completions at the Jafurah basin.
While the kingdom has scaled back its futuristic giga-projects and reversed plans to lift oil capacity, Aramco - the world's biggest oil exporter - has raised its gas production targets with this $100 billion bet at the centre, as it seeks to become a major global natural gas player.
Jafurah, estimated to contain 229 trillion standard cubic feet of raw gas and 75 billion barrels of condensate, is potentially the biggest shale gas development outside the U.S.
For decades, Saudi Arabia has burned a portion of its most valuable asset – crude oil – to power its grid. Now, with fewer than five years left to fulfil Crown Prince Mohammed bin Salman’s Vision 2030 agenda to diversify the oil-reliant economy, the pressure is on to replace those liquid fuels with gas.
"Jafurah is not just a large gas field: it is a strategic platform that supports the Kingdom's broader growth ambitions across key sectors, including energy, artificial intelligence, and major industries like petrochemicals," Aramco said in a statement in response to Reuters questions.
NEW SHALE FRONTIER
On Thursday, Aramco officially announced the start of production at Jafurah, a milestone for a project that underwent years of incubation mirroring the early years of the U.S. shale boom. It said output began in December 2025, a disclosure that Reuters reported that month after it was included in the Saudi finance ministry budget statement.
"The excellent progress at Jafurah is a testament to a decade of relentless innovation and focus on value creation," Aramco’s Upstream President Nasir Al-Naimi told Reuters.
“Early well performance has been outstanding, validating our high-tech approach and reaffirming the significance of this flagship project to our gas growth strategy.”
The maths is simple: Saudi Arabia uses more than 1 million barrels per day (bpd) of crude and fuel oil for domestic power generation. Aramco aims to replace 500,000 bpd of that by 2030 with gas, freeing up the crude for export. At current prices of around $70 a barrel, 500,000 bpd of crude would generate nearly $12.8 billion in revenue a year.
In its statement on Thursday, Aramco said it expects the gas expansion to generate incremental operating cash flows of $12 billion to $15 billion in 2030.
"Through our strategic gas expansion, we anticipate attractive double-digit returns as we set about unlocking significant volumes of high-value liquids and capitalize upon captive domestic gas demand," Al-Naimi told Reuters.
Reuters analysis of rig data from Baker Hughes, tender awards, and corporate filings reveals that Jafurah has emerged as the kingdom’s priority capital project and a new frontier for U.S. oilfield services firms just as the U.S. shale boom matures and they look for opportunities elsewhere.
Jafurah offers a rare prize: a massive, untapped unconventional basin requiring the hydraulic fracturing and horizontal drilling expertise perfected in Texas.
Rig count data shows that while activity in the U.S. Permian Basin has plateaued, gas drilling in Saudi Arabia has increased as development of Jafurah picked up and capital was redeployed after the kingdom scrapped a previously planned 1 million-bpd oil capacity expansion.
Aramco has announced around $26 billion worth of contracts for Jafurah's first two phases since 2018, when it awarded Halliburton a contract for unconventional so-called gas stimulation, usually fracking. Other first-phase contracts went to Sinopec, South Korea's Samsung Engineering and Italy's Saipem.
To make shale extraction viable in the punishing desert environment, its engineers have also developed bespoke technology, according to company journals. Solutions include treating Gulf seawater to remove well-clogging sulphates for underground injection and ultra-strong diamond drill bits to cut through abrasive rock without overheating.
PRODUCTION TARGETS REVISED UP
Aramco is targeting 2 billion standard cubic feet per day (bcfd) of gas from Jafurah, 420 million standard cfd of ethane, and 630,000 bpd of associated liquids by 2030.
At its peak, Jafurah could produce up to 1 million bpd of condensates, a source with knowledge of the matter told Reuters. Condensates are non-gas liquids that can be processed to produce petrochemical feedstock naphtha and other refined products.
In November, Aramco said it was raising its kingdom-wide gas expansion goal to 80% above 2021 levels, from a 60% targeted boost announced in March 2024. Based on the company's 2021 baseline of 9.2 bcfd, Reuters calculations show the revision means Aramco aims to pump nearly 2 bcfd extra by the end of the decade, which is the same volume Aramco has targeted from the Jafurah project.
Some industry analysts, however, have questions about the pace of the ramp-up. Aramco had previously said Jafurah was expected to come online in early 2024.
"There is still a lot of uncertainty around the pace of ramp-up and how much of the condensates will be exported or used as feedstock," said Monica Malik, chief economist at ADCB.
She projected that revenue from Jafurah could add 0.3% to Saudi GDP growth in 2026.
REGIONAL RIVALS ALSO ON THE MOVE
The gas expansion is designed to extend the lifespan of Saudi Arabia's hydrocarbon revenues, which still account for more than half of the state budget, while positioning Riyadh to benefit from booming Asian demand, said Neil Quilliam, associate fellow at think tank Chatham House.
While it frees up crude for export, Aramco is also building a global liquefied natural gas portfolio by investing in projects abroad. It has taken a stake in LNG firm MidOcean and signed 20-year supply agreements for supplies from Commonwealth LNG's proposed Louisiana project and NextDecade's Rio Grande terminal in Texas.
Aramco's focus on gas comes as Qatar - whose reserves are conventional and so easier to extract than shale - pushes ahead with its own production expansion, aiming to cement its regional gas supremacy. Abu Dhabi National Oil Company is also making a big push into gas and LNG domestically and abroad.
The International Energy Agency and some market participants expect a surge of new Qatari and U.S. LNG this decade that could create a global supply glut and depress prices. Aramco's long-term ambition is LNG capacity of 20 million tons per annum (mtpa), Chief Executive Amin Nasser told analysts in August. Qatar has 77 mtpa of capacity, expected to reach 142 mtpa by 2030, while ADNOC targets 20 to 25 mtpa by 2035.
Aramco expects domestic gas demand, meanwhile, to continue to rise, driven by industrial growth encompassing manufacturing, mining, and petrochemicals, Al-Naimi told Reuters.
(Reporting by Yousef Saba; Editing by Emelia Sithole-Matarise)
Jafurah is Aramco’s $100 billion shale gas megaproject aimed at raising gas production and positioning the company as a major global natural gas player.
Aramco said output began in December 2025 and it officially announced the start of production on Thursday.
Aramco estimates Jafurah contains 229 trillion standard cubic feet of raw gas and 75 billion barrels of condensate.
Saudi Arabia uses more than 1 million bpd of crude and fuel oil for domestic power; Aramco aims to replace 500,000 bpd by 2030 with gas, freeing crude for export.
Aramco said it expects incremental operating cash flows of $12 billion to $15 billion in 2030, and replacing 500,000 bpd of crude could generate nearly $12.8 billion in annual revenue at around $70 a barrel.
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