Sinopec and TotalEnergies SE are among the companies in talks to invest in Saudi Arabia’s Jafurah development, according to people familiar with the matter, as the kingdom seeks to exploit one of the world’s largest untapped gas fields.
The Chinese and French energy giants are in separate talks with Saudi Aramco about plans that may include building facilities to export the fuel as liquefied natural gas, said some of the people, who asked not to be identified because the matter is private. Aramco is looking to raise a total of about $10 billion for the projects, the people said.
Saudi Aramco has been looking for equity investors that can help finance midstream and downstream projects at its more than $100 billion Jafurah gas development in the kingdom’s east. The state-controlled firm has approached private equity firms and other large funds that invest in infrastructure to offer stakes in assets such as carbon capture and storage projects, pipelines and hydrogen plants, it said. report Bloomberg in December. Investment bank Evercore Inc. is advising Aramco on the plans.
Talks are ongoing and no final decisions have been made, the people said. Representatives for Aramco and TotalEnergies did not immediately respond to a request for comment. China Petroleum & Chemical Corp., as Sinopec is officially known, did not respond to emailed requests for comment during China’s Labor Day holiday.
The war in Ukraine has led to a surge in demand for natural gas, led by European nations that traditionally sourced their supplies from Russia. This has led the Gulf states to embark on ambitious plans to expand their gas production.
Saudi Arabia has some of the largest gas reserves in the world, but has barely exploited them in the past. Now, Jafurah is a key part of Riyadh’s strategy to diversify its exports beyond oil. The field is estimated to contain 200 trillion cubic feet of gas, and Aramco expects to begin production there in 2025, reaching about 2 billion standard cubic feet per day of sales by 2030.
The decision to build an LNG export terminal would mark a turning point for Aramco. The company recently said most of the gas from Jafurah and other fields would be used for the domestic market and to make blue hydrogen.
Since Aramco was fully nationalized in 1980, most foreign investment in the kingdom’s energy industry has been restricted to downstream assets such as refineries and petrochemical plants. In the past, Aramco has formed joint ventures with companies such as Shell Plc and TotalEnergies for the exploration and drilling of natural gas within its borders.
–With assistance from Stephen Stapczynski, Paul Wallace, Francois de Beaupuy, Ruth Liao and David Stringer.
