Saudi Arabia announces plans to start shale production

Saudi Arabia is preparing to become one of the first countries outside North America to use shale gas for power generation, reports Reuters.

Keen to jump on the US shale bandwagon, the oil heavyweight has announced its initial plans to capitalise on its large unconventional deposits, thereby retaining its oil for export.

Speaking at the World Energy Congress in South Korea, Saudi Aramco chief executive Khalid al-Falih said today: "We are ready to start producing our own shale gas and unconventional resources in various types in the next few years and deliver them to consumers".

Oil minister Ali al-Naimi has given an estimate of over 600 trillion cubic feet of unconventional gas reserves - more than double its proven conventional reserves, although the country remains restricted by limited water supply and priced fixed considerably below production costs.

Falih went onto say that the country is "ready to commit gas for the development of a 1,000 megawatt power plant which will feed a massive phosphate mining and manufacturing sector", with the Saudi Arabian Mining Company planning to invest in a phosphate project which is part of a new industrial city called Waad al Shimal City for Mining Industries. Production there is intended to begin by the end of 2016.