Aramco slow-walks LNG expansion

Saudi Aramco has been talking about expanding into liquefied natural gas (LNG) for the best part of a decade. Last month, CEO Amin Nasser appeared to commit to the strategy by unveiling a target to build a top-ten global LNG portfolio.

The idea has always captivated investors and editors; Saudi Arabia’s national oil company has the financial heft to build a world-beating LNG empire, if it wanted to.

Aramco hopes to finalise LNG investments totalling 7.5 mtpa by 2030, before expanding to 20 mtpa thereafter — from a standing start.

In terms of operational assets in its portfolio, Aramco has barely ~1 mtpa of indirect exposure, or 0.3% global market share, according to research by Energy Flux.

Saudi Aramco is sitting on a sea of domestic gas at home. It boasts a deep balance sheet, industry-leading returns and low debt levels that are still the envy of most listed oil companies, even if some of the shine has come off since the 2019 initial public offering.

The Saudi state oil company is spearheading the kingdom’s economic diversification agenda, and gas is supposedly the world’s great transition fuel. LNG might seem like the logical next step… and yet, it is barely a footnote in the NOC’s growth plans.

So, why is Aramco’s LNG expansion taking so long to get off the ground?

This subscriber-only Deep Dive explores why Aramco’s 20 mtpa ‘target’ is little more than a tease for capital markets — and what the slow-walk approach tells us about the risk-reward balance for investments in this space.

💥 Article stats: 2,700 words, 16-min reading time, 4 charts & graphs