LNG

May 31 (LNGJ) - The Government of the Kingdom of Saudi Arabia and the Saudi Aramco oil company are proceeding with a secondary share offering that could raise more than $13 billion. Aramco, which is currently seeking global LNG volumes and boosting domestic natural gas production, said the offering would be made to institutional investors in Saudi Arabia, overseas institutional investors, Saudi retail investors and investors in the Gulf Cooperation Council countries.

   The offering comprises 1.545 billion Aramco shares representing 0.64 percent of the company’s issued share capital. “The price range for the offered shares is between 26.70 Saudi riyals ($7.11) and 29.00 riyals ($7.73) per share,” Aramco said.

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.

Tellurian Inc., the developer of the US Driftwood LNG export plant planning to supply nations such as India and with Indian company Petronet investing in the venture, said it was still in talks with Saudi Arabian energy company Saudi Aramco about taking an equity stake.