Saudi Shale Leap Redraws Gulf Energy Ambitions

Riyadh expands Jafurah output as investors back unconventional gas

3 Dec 2025

Saudi Arabia has begun production at the Jafurah shale gas field, opening a new phase in its effort to expand domestic gas supply and reduce long-term reliance on oil. Early output of about 450mn cubic feet a day and a planned investment of roughly $100bn place the project among the most significant unconventional developments outside the US.

The field’s estimated reserves have been revised over time, rising from about 200tn cubic feet to recent figures near 229tn. Officials say this underlines Jafurah’s role in meeting industrial demand and supporting economic diversification.

Financing momentum has been reinforced by an $11bn midstream agreement with a group led by Global Infrastructure Partners, part of BlackRock. The consortium will take a 49 per cent stake in key processing assets under a long-term lease, while Saudi authorities retain operational control. Analysts view the arrangement as evidence of steady global interest in energy projects tied to wider Gulf restructuring plans.

Regional strategists argue that Jafurah forms part of a broader shift toward unconventional resources across the Middle East. Shale development, still limited in the region, is seen as a way to reduce crude use in power generation, create space for new industries and build optionality for future gas exports.

Technical hurdles remain, including the demands of operating in geological settings that have seen little commercial shale activity. But advisers say investor sentiment has held up as initial production confirms the field’s potential scale.

Officials expect progress at Jafurah to encourage similar ventures in neighbouring states, potentially altering regional gas flows and supporting industrial growth linked to more reliable domestic supply.

As output expands toward longer-term targets, the project is set to influence how Gulf producers position themselves in global gas markets and how they balance investment between conventional and unconventional sources.