Saudi Aramco is looking for natural gas assets from Russia to East Africa and the U.S. as the kingdom’s state-owned energy giant hunts for ways to meet soaring domestic demand.
The comments by Khalid Al-Falih, who’s both Aramco chairman and Saudi energy minister, are a tacit admission Aramco has failed to find enough domestic gas reserves despite years of exploration. He’s now considering imports of super-cooled liquefied natural gas to bridge the gap with local consumption and cut the amount of crude oil burned in power stations instead of exported for a profit.
“Aramco is drawing a very wide net,” said Al-Falih, mentioning the Mediterranean and the Caspian Sea as other potential target for gas assets.
Saudi Arabia diverts tens of millions of barrels of crude every year into its electricity generation plants, particularly during the peak air-conditioning season in the summer. It doesn’t produce enough gas to supply its power stations. Most the gas it does produce goes to its fast-growing petrochemical industry.
Al-Falih wouldn’t rule out buying LNG from Russia, which this month opened a new plant in the Arctic, although he cautioned it wasn’t the most economical option at the moment.
“The question of Russian gas, and being able to export around the world, including potentially to Saudi Arabia, is an intriguing question that it would not exclude," he told Bloomberg Television in an interview in Riyadh after the kingdom presented its 2018 budget.
“Is it our lowest hanging fruit?” he said. “The answer today is not. But I think we are in an interesting moment to talk about the potential to buy LNG from the Russian Arctic.”
Al-Falih also said that Aramco has looked at potential to growth its footprint in the U.S. through its subsidiary Motiva -- the largest refinery in the country -- via potnetially investing in petrochemcial production.
“They are looking for potential integration there if it makes economic sense,” he said about Aramco’s plans in America.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.