LNG

Saudi Arabia, the latest entrant into the LNG market with two supply contracts signed in Texas, has discovered seven more oil and gas fields in the Kingdom’s Eastern Province and in the Empty Quarter.

Saudi Energy Minister Prince Abdulaziz bin Salman said Saudi Arabian Oil Company (Aramco) had just discovered “two unconventional oil fields, a reservoir of light Arabian oil, two natural gas fields, and two natural gas reservoirs” in recent weeks.

Two unconventional oil fields and one reservoir were discovered in the Saudi Eastern Province while the two natural gas fields and two gas reservoirs are in the Empty Quarter.

The “Ladam” unconventional oil field was discovered in the Eastern Province after the flow of very light Arabian oil in the Ladam-2 well at a rate of 5,100 barrels per day, accompanied by about 4.9 million standard cubic feet of gas per day.

In addition to having much more oil and gas than Texas, Aramco was still happy to sign to supply agreements with the Port Arthur LNG project and the Rio Grande LNG joint venture.

Discoveries list

Outlining its own recent discoveries, Aramco added that the “Al-Farouk” unconventional oil field was discovered in the Eastern Province after Arab ultra-light oil flowed from the Al-Farouk-4 well at a rate of 4,557 barrels per day, accompanied by about 3.79 million standard cubic feet of gas per day.

The “Unayzah” reservoir was discovered in the “Mazalij” field in the Eastern Province, after Arab Light oil flowed from the Mazalij-62 well at a rate of 1,780 barrels per day, accompanied by about 0.7 million standard cubic feet of gas per day.

The “Al-Jahaq” resources were found in the Empty Quarter after natural gas flowed from the “Al-Arab-C” reservoir in Al-Jahaq-1 well at a rate of 5.3 million standard cubic feet per day, and from the “Al-Arab-D” reservoir in the same well at a rate of 1.1 million standard cubic feet per day. 

The Empty Quarter is the largest continuous sand desert in the world and is almost the size of France, covering about 650,000 square kilometres of arid and inhospitable terrain - containing nothing but oil and gas.

The “Al-Katuf” field was discovered in the Empty Quarter after natural gas flowed into Al-Katuf-1 well at a rate of 7.6 million standard cubic feet per day, accompanied by about 40 barrels per day of condensate.

The “Hanifa” reservoir was found in the “Asikra” field in the Empty Quarter after natural gas flowed in the Asikra-6 well at a rate of 4.9 million standard cubic feet per day.

LNG deals

Aramco has signed a second US LNG accord to receive volumes from another Texas export, the Port Arthur liquefaction joint venture in Texas being developed by Sempra Infrastucture, and has followed up on a deal signed earlier in June with the Rio Grande export project in the Port of Brownsville.

Sempra has signed a non-binding Heads of Agreement as part of a 20-year deal for Aramco to offtake 5 million tonnes per annum from the Port Arthur LNG Phase Two expansion.

The accord also contemplates Aramco taking a 25 percent participation in the project-level equity of Phase Two.

The Aramco deal with the Port Arthur project follows an earlier accord signed by the Saudis in mid-June 2024 with NextDecade Corp., the developer of the Rio Grande LNG export plant in Texas.

Aramco and NextDecade confirmed a non-binding accord for the supply of cargoes from the future Train 4 of the Rio Grande plant being constructed at the Port of Brownsville.

That Heads of Agreement was for 20 years and was also with the upstream division of Aramco.

The Rio Grande project is located on 984 acres of land which has been leased long term and includes 15,000 feet of frontage on the Brownsville Ship Channel. 

Saudi Energy Minister Prince Abdulaziz bin Salman said Saudi Arabian Oil Co., known as Saudi Aramco, has made two large natural gas field discoveries after recently also entering the LNG sector while additionally starting output in a Saudi shale gas basin called South Ghawar.

Saudi Arabian Oil Company (Saudi Aramco), the world’s largest oil production group, has signed definitive agreements to acquire a strategic minority stake in MidOcean Energy for $500 million and thus enter the liquefied natural gas sector initially in Australia.

A heavy-lifting, transportation and installation contract has been awarded to privately held Dutch company Mammoet for Saudi Aramco’s natural gas storage and gas resources management project, the Aramco Hawiyah Unayzah Gas Reservoir Storage venture, located 260 kilometres (160 miles) east of Saudi Arabia's capital Riyadh.

The Saudi Arabian Oil Company, Saudi Aramco, has signed one of the world’s largest ever energy infrastructure deals worth $12.4 billion with the Washington DC-based EIG Global Energy Partners fund as part of a program to secure private capital for more broad-based activities such as new energy projects.

Aramco, a future player in the LNG market and a developer of green energy such as hydrogen, reported record production during 2020 of natural gas as well as oil.

This is the first major deal by Aramco since its stock exchange listing in late 2019 when the Saudi government sold a minority stake in the firm for $29.4Bln in the world’s biggest initial public offering.

The EIG group has now signed a lease and lease-back agreement with Aramco, acquiring a 49 percent equity stake in the newly formed Aramco Oil Pipelines Co., with rights to 25-years of tariff payments for oil transported through Aramco’s crude oil pipeline network.

Aramco will still own a majority 51 percent stake in the new company. The deal comes at a time when the Saudis are aiming to boost domestic natural gas output and are looking at investments in the LNG market and green gases for clean energy supplies for Asia.

“The transaction reflects ongoing progress in Aramco’s portfolio optimization program, which aims to unlock value and maximize shareholder returns,” said Aramco.

“Significant injection of foreign capital reinforces Aramco’s leading position in the international energy arena and Saudi Arabia’s appeal to prominent institutional investors globally,” added the Saudi company.

Upon closing, Aramco will receive upfront proceeds of around $12.4Bln, further strengthening its balance sheet.

The investment firm EIG has invested more than $34Bln in energy and energy infrastructure projects around the world.

Analysts noted that the transaction would not impose any restrictions on Aramco’s actual crude oil production volumes that are subject to production decisions issued by the Kingdom itself.

“This landmark transaction defines the way forward for our portfolio optimization program,” said Aramco President and Chief Executive Amin H. Nasser.

“We are capitalizing on new opportunities that also align strategically with the Kingdom’s recently-launched Shareek program,” added Nasser.

Saudi Arabia’s Crown Prince Mohammed bin Salman launched the Shareek program in March 2021 to strengthen collaboration between the government and the private sector, which he said would enable private investment of 5 trillion Saudi riyals ($1.33 trillion) through 2030.

The word “Shareek” , which means “Partner” in Arabic, and its associated program is aimed at helping the world’s largest oil exporter to reduce its dependence on crude oil and achieve its other ambitious goals in the realms of clean energy and smart-city technologies.

“Aramco’s strong capital structure will be further enhanced with this transaction, which in turn will help maximize returns for our shareholders,” explained Nasser.

“Additionally, our long-term partners in this venture will benefit from investment in one of the world’s most robust energy infrastructures. Moving forward, we will continue to explore opportunities that underpin our long-term strategy,” added Nasser.

R. Blair Thomas, EIG’s Chairman and CEO, said he was honoured to partner with Aramco, describing the company as an undisputed industry leader.

“Aramco’s oil pipeline network is a marquee global infrastructure asset. We look forward to investing in this infrastructure which is critical to the global economy, and to driving value for our institutional investors worldwide,” stated Thomas.

The Saudi Arabian Oil Company, Saudi Aramco, reported a 44 percent drop in annual profits, though still earned a net $49 billion in 2020 as it posted record oil and natural gas output even as revenues were affected by lower crude oil prices and sales tumbled because of the economic slump caused by Covid-19.

Sempra Energy, the California company operating the Cameron LNG export plant in Louisiana, has signed a fixed-price contract with US engineer Bechtel to construct its second Gulf Coast plant at Port Arthur in Texas to be backed by a subsidiary of Saudi Aramco, the largest oil producing company.