LONDON: Saudi Aramco has outlined to Arab News how it plans to massively ramp up its multibillion-dollar natural gas business, both in the Kingdom and overseas, as gas gradually replaces coal and oil in global power generation.
Gas is viewed as a cleaner energy source than coal or oil in power stations, and there is soaring demand in Asia.
“Gas is already a large global business and is expected to be among the fastest-growing fuels (60 percent growth) over the next quarter-century. And LNG (liquefied natural gas) is expected to make up almost half of global gas trade over the same period,” Aramco said in a statement.
“We already produce about 14 billion standard cubic feet (bscfd) of gas, which is on the road to being expanded to 23 bscfd, which will increase our share of cleaner gas in domestic utilities from the current 55 percent to 75 percent, the highest in G-20.
“When combined with our move toward international gas business, Saudi Aramco is on the way to becoming a gas powerhouse in addition to its huge strength in oil.”
Aramco said that bolstering its position in the global gas and LNG business would “strengthen our competitive advantage, and diversify operations.”
Aramco this year signed a memorandum of understanding with Royal Dutch Shell to jointly pursue global gas business opportunities, including upstream development, liquefaction projects and other aspects of the gas value chain.
According to classification society DNV GL’s latest Energy Transition Outlook, by 2025 expenditure on upstream gas will grow to $1.13 trillion.
Saudi Arabia’s gas expansion is set to free up more oil for export, boosting national revenue and potentially opening up new areas for employment, said Iman Nasseri, a managing director at London-based consultancy FGE.
Jim Henderson, an expert in Middle Eastern energy and geopolitics at the Oxford Institute of Energy Studies, said: “Lifting the amount of oil for export is part of an approach that aims to have as much oil available for sale overseas in order to more effectively manage global demand for crude.”
Aramco’s gas exploration efforts have resulted in finding big volumes of shale gas in the Jafurah Basin in southeastern Saudi Arabia. “They are highly promising quantities and economically feasible as they contain a high rate of liquids; activities to evaluate the reserves are ongoing,” said Aramco.
“Unconventional gas contribution will reach to 15 percent of the total gas production of 23 billion bscfd per day in the gas program over the next 10 years.”
Aramco views shale as a “strategic investment” that would help to further supplement “our vast conventional gas resources.” It would be used for domestic utilities and fuel, as well as feedstock “for our industries, including petrochemicals.
The Kingdom’s LNG story has highlighted the evolving Saudi-Russia energy alliance. Speaking on the sidelines of a recent investment summit in Riyadh, Energy Minister Khalid Al-Falih said the Kingdom aimed to acquire 30 percent of Russian gas producer Novatek’s $21 billion liquefied natural gas project in the Arctic.
In 2016, OPEC and Russia struck an agreement to cut crude production following a build-up in inventories that led to a price slump.
Asked how important LNG investment overseas was for Aramco, the company said: “Saudi Aramco aims to diversify operations and expand our international gas business. We’re committed to increasing production capacity to take advantage of opportunities resulting from increased use of gas — both as an energy source and as a feedstock for the chemicals industry.”
Trevor Sikorski, head of natural gas and carbon research at consultancy Energy Aspects in London, told Arab News: “By taking equity stakes in LNG operations, they would cover the possibility of rising prices via a capital investment, rather than through contracts that could expose them to price fluctuations going forward.”
Aramco’s recent worldwide oil-refinery investments in countries such as Malaysia give it a presence in a region where it could market LNG from places such as Russia, said Robin Mills, CEO of Dubai-based Qamar Energy.
He told Arab News: “(Aramco sees) Asia as at the heart of gas and oil demand growth.”
Geraldine Duffour, of France-based energy research firm Enerdata, said: “Since 2000, Saudi Arabia’s energy demand has more than doubled.”
She added: “As Saudi Arabia is keeping its domestic oil production for exports, gas has been increasingly used in the power sector (from 46 percent of power generation in 2000 to 59 percent in 2017) and total gas consumption has been rising by around 6 percent per year since 2000.”
In 2016, Aramco announced plans to double gas production within 10 years, and to develop Saudi gas fields, including shale deposits.
Al-Falih said at the India Energy Forum in New Delhi last month that Aramco was open to the idea of marketing some LNG from the proposed Russian Arctic LNG 2.
OilPrice.com reported Al-Falih as saying: “We have looked at projects in Africa and the Mediterranean, and, of course, the Arctic with some Russian companies. The idea is that Aramco will trade (LNG) globally and bring some to India and other markets.”
Saudi Aramco ‘on way to becoming gas powerhouse’
Saudi Aramco ‘on way to becoming gas powerhouse’
Foreign buying of Saudi stocks hits $1.33bn ahead of Feb rule change
RIYADH: Foreign investors made net purchases of around SR5 billion ($1.33 billion) in Saudi stocks during January, coinciding with the announcement that the market would be opened to all categories of non-resident foreign investors — individuals and institutions from around the world — directly and without conditions.
According to the Financial Analysis Unit at Al-Eqtisadiah, January’s foreign buying represents the largest monthly purchases since 2022, excluding June 2024, when Aramco held a secondary offering, and September 2025, following a Bloomberg report that the Saudi Capital Market Authority, or CMA, would allow foreigners to hold majority stakes in listed companies.
Since the market-opening announcement on Jan. 6, Saudi stocks rose by about 10.6 percent by the end of the month. These results were accompanied by a rally in the banking sector, which is expected to benefit most from the lifting of ownership restrictions and strong fourth-quarter results.
Rising oil prices also supported increases in Aramco, the largest stock by weight on the Tadawul All Share Index, alongside gains in Maaden following new discoveries and higher gold prices, as well as SABIC, after news of asset sales in Europe and the Americas that had previously caused losses for the company.
The new amendments removed the regulatory framework for swap agreements, which had been used to allow non-resident foreign investors to gain only the economic benefits of listed securities and to enable direct investment in stocks listed on the main market.
Foreign purchases in January reflected buying by foreign investors who were already in the market ahead of the decision’s implementation in early February.
Foreign buying last month was likely driven by active funds. With the easing of restrictions, the market’s weight in emerging-market indices is expected to rise later, which could in turn attract additional inflows from passive funds that follow market and company weights in these indices.
The largest impact is expected on TASI’s weight in emerging-market indices, following the proposed increase in foreign ownership caps for listed companies, pending CMA approval.
Foreign investors accounted for around 41.7 percent of total market purchases in January, compared with just 5.6 percent in 2018, before joining emerging-market indices, highlighting their growing influence in the market.
With the market rally and foreign buying in January, the value of foreign investors’ holdings rose to SR465.5 billion, representing 4.87 percent of the total market and 12.67 percent of free-floating shares. Their influence also increased in terms of free-floating shares, rising from 11.01 percent at the end of 2024 to 12.4 percent by year-end.
The latest regulatory decision is expected to improve market liquidity over the long term, make stock valuations fairer, expand the investor base, deepen the market, and enhance overall efficiency.
Foreign investment rules in Saudi stocks
Foreign investments in Saudi stocks are currently subject to several restrictions, including that non-resident foreign investors, excluding strategic foreign investors, may not own 10 percent or more of the shares of any listed company or its convertible debt instruments.
Foreign investors — all categories, resident or non-resident, except strategic foreign investors — may not collectively hold more than 49 percent of any listed company’s shares or convertible debt.
These limits are in addition to any restrictions set out in companies’ bylaws, other statutory regulations, or instructions issued by the relevant authorities that apply to listed companies.
