The Clap
The global oil giant Aramco (2222) signed contracts with an international consortium consisting of the Spanish company “Técnicas Reunidas S.A.” and the Chinese group “Sinopec Engineering.”
The purpose is to develop a new facility for processing liquefied natural gas in the Kingdom, valued at over USD 3 billion.
What
The alliance’s share is distributed with a 65% stake for Técnicas Reunidas and a 35% stake for the Sinopec Engineering Group. This means that the former will acquire over $2.15 billion of the total investment.
The Spanish company stated that the two contracts, covering engineering, procurement, and construction works, include the construction of facilities for liquefied natural gas distillation (Phase One). In addition, there are joint facilities (Phase Two) in the “Riyas NGL Fractionation Facility” project, involving storage and export facilities.
So What
This is the first project awarded by Aramco to Técnicas, following the recent strategic alliance between the Spanish company and the Sinopec group. The joint project aims to “fractionate natural gas liquids” in Saudi Arabia, producing ethane, propane, butane, and pentane. The new facilities to be developed by the Técnicas-Sinopec alliance will fractionate 510 thousand barrels per day of natural gas liquids.
Some Context
Amin Nasser, the CEO of Aramco, revealed in October last year the company’s pursuit of further investments in the liquefied natural gas sector, aiming to become a “key player” in the global market.
To achieve this goal, Aramco made its “first-ever deal” in the sector by acquiring a stake worth around $500 million, with the potential for an increase. This acquisition was made in “Med Ocean Energy” which holds stakes in four Australian liquefied natural gas projects.
Other Claps
Mohammed El Kuwaiz, the Chairman of the Saudi Capital Market Authority, mentioned their efforts to “diversify financial products” during the current year. This involves enhancing the debt market, the fund sector, and real estate contributions.
Additionally, during his participation in the “Future of Real Estate Forum” on Monday, he stated that the Authority intends to allow foreigners to invest “for the first time” in listed companies that own properties in Mecca and Medina.
