The U.S. shale gas boom will spread "far and wide," the head of Saudi Aramco said Monday, announcing the state oil giant was set to supply gas to a massive Saudi power plant project.
The world's largest oil exporter launched an unconventional gas program in northern Saudi Arabia two years ago, as it sought alternative domestic fuel supplies that would allow an expansion of lucrative oil exports.
"We are now ready to commit gas for the development of a 1,000 megawatt power plant, which will feed a massive phosphate mining and manufacturing center in the region," company president Khalid al-Falih told the World Energy Congress underway in Daegu, South Korea.
Oil Minister Ali Naimi estimated in March that Saudi Arabia had 600 trillion cubic feet of technically recoverable shale gas.
With domestic energy consumption rising, Saudi Arabia has less oil available for the exports on which its economy depends, and shale gas is seen as a possible solution.
But experts note that the vast amounts of water needed to produce shale gas by hydraulic fracturing, or fracking, would be a major challenge.
Al-Falih gave no details as to how much gas Aramco could commit to the power plant, or when supplies might start, but he was bullish on the sector's overall future.
"I believe the US shale revolution will spread far and wide... The rush, ladies and gentlemen, is definitely on," he told the Congress in a keynote speech.
The Congress, which takes place every three years, draws leading energy officials from around the world and is dubbed the "Energy Olympics".
Highlighting what he described as the world's "colossal endowment" of fossil fuels, Al-Falih said the main challenge of providing energy for a growing world population lay in improving end-use efficiency.
"It is not preordained that demand has to rise to unsustainable levels, even if we provide everyone with sufficient energy," he said.
"Improved energy intensity is our low hanging fruit and can deliver similar economic growth using considerably less energy," he added.
Al-Falih said the world's current gas reserves of more than 7,000 trillion cubic feet had "enormous room" to grow, as the unconventional gas revolution has expanded the world's technically recoverable gas resources to 30,000 trillion cubic feet.
"If we could economically recover them, they could meet global gas demand at current rates for more than 250 years," he said.