SAUDI VIES TO BECOME MAJOR LNG SUPPLIER 
Saudi Aramco delivered robust earnings as it accelerated its growth strategy, and explored new market opportunities.
The company, which is one of world’s leading integrated energy and chemicals companies, signed agreements in September to acquire a strategic minority stake in MidOcean Energy for USD 500 million. MidOcean Energy is a liquefied natural gas (LNG) company formed and managed by EIG, an institutional investor in the global energy and infrastructure sectors. MidOcean Energy is currently in the process of acquiring interests in four Australian LNG projects, with a growth strategy to create a diversified global LNG business.
The strategic partnership marks Aramco’s first international investment in LNG. The agreement builds on the relationship between Aramco and EIG, which was part of a consortium that acquired a 49% stake in Aramco Oil Pipelines Company, a subsidiary of Aramco, in 2021.
“We anticipate strong demand-led growth for LNG as the world continues on its energy transition journey, with gas being a vital fuel and feedstock in various industries. We believe that gas will be important in meeting the world’s rising need for secure, accessible and more sustainable energy,” said Amin H. Nasser, Aramco president and CEO.
Aramco aims to become a major LNG player, with significant opportunities on which to capitalise. MidOcean Energy is well-equipped to meet rising LNG demand, and this strategic partnership reflects Aramco’s willingness to work with leading international players to identify and unlock new opportunities at a global level, the company said.
STRATEGIC EXPANSION
Aramco’s third quarter results speaks to its continued investment in its growth strategy. It reported net income of USD 32.6 billion for the quarter, with free cash flow at USD 20.3 billion. The company continued its strategic expansion with plans to enter South American market through a downstream retail acquisition
“We intend to continue investing across the hydrocarbon chain, leveraging cutting-edge technologies to optimise our operations and advance the development of emerging energy solutions,” Aramco’s Nasser said. “It is an approach rooted in our belief that a balanced and realistic energy transition plan should consider the needs of all geographies, in order to avoid disparities between global energy consumers.
The company also increased raw gas processing capacity by 800 million standard cubic feet per day (mmscfd), including approximately 750 mmscfd of sales gas processing capacity, through the Hawiyah Gas Plant expansion.
“Commissioning activities for the gas compression projects at the Haradh and Hawiyah fields are in advanced stages of completion, with eight of the nine plants commissioned and the final plant expected to be fully onstream in 2023,” the company said.
LNG CONSUMPTION
The LNG market has emerged as a major energy transition source, gaining importance in light of geopolitical tensions in Europe.
“The global LNG trade network is expanding, and now connects 20 exporting markets with 48 importing markets, including, in 2022, first-time LNG importers Germany, the Philippines, and Vietnam,” according to a new report by research firm Evaluate Energy.
In the last decade, regasification capacity has doubled, reaching 140 billion cubic feet per day (bcf/d), according to the US Energy Information Administration (EIA). Global LNG import capacity is set to expand by 16%, or 23 bcf/d, by the end of 2024 compared with 2022.
By the end of 2024, the EIA expects 55 countries to have LNG regasification terminals with a combined capacity of 163 bcf/d. Last year, global LNG trade used 37% of available regasification capacity, or 51.7 bcf/d.
“Market expansion will continue for the remainder of the decade. Cyprus is expected to start importing LNG in 2024, and Germany will have three more import terminals online by the end of 2023,” Evaluate said.
GLOBAL OIL DEMAND
The Organization for the Petroleum Exporting Countries (OPEC) raised its global oil demand growth forecast for this year by 2.5 million barrels per day (bpd). In the non-OECD, the upward revisions to China’s oil demand in both 3Q23 and 4Q23 outpaced the downward revisions in the non-OECD region in 3Q23. In 2023, OECD oil demand is expected to rise by around 0.1 million barrels per day (mb/d), while non-OECD oil demand is expected to increase by 2.4 mb/d. For 2024, world oil demand is expected to grow by a healthy 2.2 mb/d, unchanged from the previous month’s assessment, OPEC said in its November assessment.
“OPEC NGLs (natural gas liquids) and non-conventional liquids are forecast to grow by around 50 tb/d in 2023 to average 5.4 mb/d and by another 65 tb/d to average 5.5 mb/d in 2024. OPEC-13 crude oil production in October increased by 80 tb/d m-o-m to average 27.90 mb/d, according to available secondary source,” OPEC noted.
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