Saudi Aramco splits its gas business amid expansion in chemicals
Saudi Arabia’s state-run energy firm is splitting its gas production division in two, as the fuel becomes increasingly important for expanding its chemicals business and amid efforts to position itself for the energy transition.
Saudi Arabian Oil Co will create two new divisions, named
Southern Area Gas Operations and Northern Area Gas Operations, according to
people familiar with the matter. The departments will be run by Wail al-Jaafari
and Jumaan al-Zahrani, respectively, according to the people who asked not to
be identified. The appointments are awaiting board approval.
Aramco has declined to comment.
Gas is becoming increasingly important to Saudi Arabia, the
world’s largest oil exporter, as it expands its chemicals business, which uses
the fuel for feedstock. The country is also looking to convert its power plants
to gas-fired ones, which could free as much as 1mn barrels a day of crude for
export.
The kingdom is trying to position itself for the energy
transition by becoming a supplier of blue hydrogen, which is made from gas. The
carbon emitted during the process would then be captured.
Aramco reached record gas production of 10.7bn standard
cubic feet (300mn cubic metres) a day in August last year, according to its
2020 annual report.
The company’s gas division consists of 11 processing centres
with a total capacity of 16bn standard cubic feet a day of raw gas. Output had
previously been managed through one division under vice president Abdullah
al-Ghamdi, who retired, according to Aramco’s weekly magazine.
Al-Jaafari and al-Zahrani will report directly to Nasir
al-Naimi, a senior vice president overseeing all of Aramco’s upstream
businesses, one of the people said.
The new reporting structure will mirror the company’s crude
departments, which were already divided into Southern and Northern areas.
Splitting its output operations into two units could also
give Aramco greater focus on developing its gas fields. The company has a
separate department for producing shale gas resources, which it may seek
international partners to help develop.
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