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The global market for liquefied natural gas (LNG) will become even more competitive in the coming years. Saudi Arabia, the world's largest oil exporter, is now aiming to become a major LNG exporter, joining the ranks of LNG heavyweights in Qatar, Australia and the United States.
The state-owned executive director of Saudi Aramco said yesterday that the company needed $ 150 billion in investment over the next decade to increase production and become an exporter. The company is also pursuing gas development plans to offset domestic oil consumption to provide more oil available for export, a Reuters report said. Saudi Arabia also plans to produce 10% of its energy from renewable sources over the next five to six years in order to diversify its energy mix and release more crude oil for export. .
The kingdom, and de facto leader of the OPEC, is developing some thirty solar and wind projects aimed at 9.5 GW of renewable energy by 2023, as well as a construction project. of a nuclear capacity of 17.6 GW by 2032.
Saudi Aramco plans to increase its gas production from 14 billion cubic feet per day to 23 billion cubic feet a day, said its managing director, Amin Nbader, at an event in Dubai. "Our gas program … will attract about $ 150 billion in investment over the next decade," he said. "We also have world-clbad unconventional gas resources that quickly complement our vast conventional resources."
"We seek to stop satisfying only our utilities sector in the kingdom, which will occur especially with the increase of renewable and nuclear energy, to become an exporter of gas and gas-based products." Related: natural gas drives the Saudi geopolitical pivot
Nbader's remarks come just months after Saudi Arabia and Russia showed interest in joint LNG development, including Saudi Arabia's badociation with the giant Arctic LNG 2 LNG project by the Russian oil giant. 'energy. The $ 20-billion Arctic LNG-2, which began in 2022 or 2023, will be Novatek's second liquefied gas project after Yamal LNG, which began production late last year. . The Russian company is also interested in building a regasification terminal in Saudi Arabia, said Russian Minister of Energy Alexander Novak. During the meeting, Saudi Arabia also indicated that it wanted to double its own gas production over the next ten years.
Geopolitical energy alliance
In addition, a growing alliance on oil production between Saudi Arabia and Russia has already transformed the global oil markets, replacing the kingdom's dominance of Saudi oil markets with that of this new two-nation coalition. In essence, what the Saudis could do until the last supply surplus of 204 to 2016 plays the role of the world's only swing oil producer, must now be realized for all practical purposes with the help of Russia.
In the future, this energy and emerging alliance of geopolitical importance could also change the LNG markets. For his part, Russian President Vladimir Putin has indicated his intention to compete with Qatar to become the main exporter of LNG. However, while Qatar plans to increase its liquefaction capacity from 77 to 100 mPa over the next five years, Putin's goal is unlikely to succeed. However, with the help of Saudi Arabia, Moscow and Riyadh could still exert a major influence on the world LNG markets and thus create an even greater geopolitical leverage for both countries, especially in the Middle East.
The problem for the Saudis, however, is that the growing relations between Riyadh and Moscow could come at a cost, as US-Russian relations are at their lowest point since the end of the cold war. Over time, Saudi gas ambitions, as well as its need to rely on Russia to control the world oil markets, may have to be weighed against Riyadh's relations with Washington, DC. as much as the United States is still the biggest supplier of arms of the kingdom. Check the ambitions of the Iranian hegemony in the Middle East, while the US Navy still protects Saudi oil shipments transiting through the Strait of Ormuz Strait and secures much of the oil transportation routes in the world.
By Tim Daiss for Oilprice.com
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