April 17, 2024
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OIL & GAS

Saudi Aramco to Expand Natural Gas Output Capacity by 60%

The Saudi state-oil giant, Aramco, has shifted its focus from expanding oil capacity to boosting natural gas output, with plans to increase production by 60% by 2030, Reuters reports, citing an Aramco executive on the sidelines of the Houston CERAWeek energy conference.

In the third quarter of 2023, Saudi Arabia achieved significant milestones in natural gas exploration. Two major gas discoveries were made in fields located within the Empty Quarter, along with the identification of five new reservoirs in existing fields.

Gas extraction at the Al-Hiran field reached a rate of 30 million cubic feet per day, while the Al-Mahakik field saw a flow of 0.85 million cubic feet per day.

OilPrice.com reports that demand for gas is seen increasing significantly amid a global energy transition, which has prompted Saudi Arabia to move more quickly to open up the development of unconventional natural gas fields. LNG demand is expected to grow by 50% by 2030.

Saudi Aramco CEO Urges Realism in Energy Transition Plans

The Saudis’ growing interest in natural gas has also led to the Kingdom’s first acquisition in the LNG space earlier this year.

Earlier this month, Reuters cited unnamed sources as saying that Aramco and Abu Dhabi National Oil Company (ADNOC) are in talks to invest in American LNG to compete with Qatar, which lost its ranking to the U.S. in January as the world’s largest LNG exporter.

Aramco is reportedly in talks concerning the Sempra Infrastructure Port Arthur LNG Phase 2 project in Texas. Phase 1 is already producing, while Phase 2 has been proposed for expansion.

The Saudi quest to expand its natural gas production capacity, along with its increasing interest in global LNG options, comes as the Biden Administration continues with a pause in approvals for new LNG projects imposed in January and adding uncertainty to new project financing for American LNG players.

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