LNG

Australian regulators and constantly shifting government energy policies are causing extensive delays that endanger the completion of the A$18.7 billion (US$12.25Bln) takeover of Origin Energy by a North American consortium of investment funds and with a resultant side-deal also giving Saudi Aramco access for the first time to the liquefied natural gas sector.

The Saudi Arabian Oil Company President and Chief Executive Amin Nasser said that “the worst is definitely behind us” for the crude oil market, as global demand is recovering and is currently at 90 million barrels per day.

The Saudi Arabian Oil Co., the biggest crude oil company partly responsible for swamping the globe with supplies amid a demand plunge, has taken the opportunity to boost its downstream business with an internal deal valued at $69 billion amid gas and LNG plans.

Saudi Aramco’s competition with Russia on output in March 2020 sparked the worldwide drop in oil prices and along with the Covid-19 pandemic caused the energy sector to suffer from earnings erosion across all sectors, including LNG.

Saudi Aramco itself last month posted a 25 percent drop in first-quarter net income to $16.7 billion from $22.21Bln in the prior-year quarter.

The company has now positioned itself to be one of the major global petrochemicals players.

Saudi Aramco has just announced the successful completion of its share acquisition of a 70 percent stake in Saudi Basic Industries Corporation (SABIC) from the Public Investment Fund (PIF), the sovereign wealth fund of Saudi Arabia.

Four huge transactions were executed on the Saudi stock exchange, known as the Tadawul, involving SABIC shares. The total purchase price was 259.125 billion riyals (US$ 69.1Bln).

“The completion of the transaction enhances Aramco’s presence in the global petrochemicals industry, a sector expected to record the fastest growth in oil demand in the years ahead,” said the oil company.

“The acquisition of the SABIC stake is consistent with Aramco’s long-term Downstream strategy to grow its integrated refining and petrochemicals capacity and create value from integration across the hydrocarbon chain,” it stated.

Saudi Aramco had previously said it was aiming to enter the natural gas and LNG markets in the next couple of years and one of its subsidiaries has an accord to invest in Sempra Energy's Port Arthur LNG export project in Texas and to buy offtake.

Port Arthur like other ventures in the US and elsewhere will now likley be delayed. The Saudis also plan to cooperate with the United Arab Emirates on opportunities in the natural gas and LNG value chain.

Saudi Aramco and the Abu Dhabi National Oil Co. have a framework agreement to collaboration on gas and LNG in a deal that brings together the leading energy producers from the Arabian Gulf.

Amin Nasser, President and Chief Executive of Saudi Aramco, said he was excited about taking control of petrochemicals giant SABIC.

“It is a significant leap forward which accelerates Aramco’s Downstream strategy and transforms our company into one of the major global petrochemicals players,” said Nasser.

“The strategic integration of our Upstream production and Downstream chemicals feedstock production with SABIC’s chemicals platform is expected to create opportunities for selective integration synergies that support growth and add value for shareholders,” he added.

Sempra Energy, the California utility and owner of three North American LNG export projects, said it signed an agreement to supply Saudi Arabian energy company Saudi Aramco with LNG from its proposed Port Arthur plant in Texas as well as equity investment in the venture.

Saudi Aramco, the Saudi Arabian oil producer and one of the world’s largest companies by revenue, and Abu Dhabi National Oil Company have signed a framework agreement to explore opportunities for cooperation in the natural gas and liquefied natural gas sectors between Saudi Arabia and the United Arab Emirates.

Novatek, the main shareholder in the Yamal LNG export project in Siberia and one of Russia’s largest natural gas producers, confirmed that Saudi Arabia’s energy company, Saudi Aramco, was interested in joining its Arctic LNG-2 export project as a partner.

Saudi Arabia and Russia are expected to sign an accord during talks in Riyadh for investments in three major energy projects, including possible Saudi participation in a second LNG export project being developed in the Siberia region of Arctic Russia.

Russian President Vladimir Putin has inaugurated the $27-billion liquefied natural gas plant on the Yamal Peninsula of the Arctic region of Siberia as the facility starts to send cargoes to Asia and Europe, with the first shipment currently heading for a European import terminal.