Saudi Aramco ‘on way to becoming gas powerhouse’

Liquefied natural gas storage tanks at an oil refinery. Global expenditure on upstream gas is set to grow to $1.13 trillion by 2025, according to analysts. (Shutterstock)
Updated 12 November 2018
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Saudi Aramco ‘on way to becoming gas powerhouse’

LONDON: Saudi Aramco has outlined to Arab News how it plans to massively ramp up its multibillion-dollar natural gas business, both in the Kingdom and overseas, as gas gradually replaces coal and oil in global power generation.
Gas is viewed as a cleaner energy source than coal or oil in power stations, and there is soaring demand in Asia.
“Gas is already a large global business and is expected to be among the fastest-growing fuels (60 percent growth) over the next quarter-century. And LNG (liquefied natural gas) is expected to make up almost half of global gas trade over the same period,” Aramco said in a statement.
“We already produce about 14 billion standard cubic feet (bscfd) of gas, which is on the road to being expanded to 23 bscfd, which will increase our share of cleaner gas in domestic utilities from the current 55 percent to 75 percent, the highest in G-20.
“When combined with our move toward international gas business, Saudi Aramco is on the way to becoming a gas powerhouse in addition to its huge strength in oil.”
Aramco said that bolstering its position in the global gas and LNG business would “strengthen our competitive advantage, and diversify operations.”
Aramco this year signed a memorandum of understanding with Royal Dutch Shell to jointly pursue global gas business opportunities, including upstream development, liquefaction projects and other aspects of the gas value chain.
According to classification society DNV GL’s latest Energy Transition Outlook, by 2025 expenditure on upstream gas will grow to $1.13 trillion.
Saudi Arabia’s gas expansion is set to free up more oil for export, boosting national revenue and potentially opening up new areas for employment, said Iman Nasseri, a managing director at London-based consultancy FGE.
Jim Henderson, an expert in Middle Eastern energy and geopolitics at the Oxford Institute of Energy Studies, said: “Lifting the amount of oil for export is part of an approach that aims to have as much oil available for sale overseas in order to more effectively manage global demand for crude.”
Aramco’s gas exploration efforts have resulted in finding big volumes of shale gas in the Jafurah Basin in southeastern Saudi Arabia. “They are highly promising quantities and economically feasible as they contain a high rate of liquids; activities to evaluate the reserves are ongoing,” said Aramco.
“Unconventional gas contribution will reach to 15 percent of the total gas production of 23 billion bscfd per day in the gas program over the next 10 years.”
Aramco views shale as a “strategic investment” that would help to further supplement “our vast conventional gas resources.” It would be used for domestic utilities and fuel, as well as feedstock “for our industries, including petrochemicals.
The Kingdom’s LNG story has highlighted the evolving Saudi-Russia energy alliance. Speaking on the sidelines of a recent investment summit in Riyadh, Energy Minister Khalid Al-Falih said the Kingdom aimed to acquire 30 percent of Russian gas producer Novatek’s $21 billion liquefied natural gas project in the Arctic.
In 2016, OPEC and Russia struck an agreement to cut crude production following a build-up in inventories that led to a price slump.
Asked how important LNG investment overseas was for Aramco, the company said: “Saudi Aramco aims to diversify operations and expand our international gas business. We’re committed to increasing production capacity to take advantage of opportunities resulting from increased use of gas — both as an energy source and as a feedstock for the chemicals industry.”
Trevor Sikorski, head of natural gas and carbon research at consultancy Energy Aspects in London, told Arab News: “By taking equity stakes in LNG operations, they would cover the possibility of rising prices via a capital investment, rather than through contracts that could expose them to price fluctuations going forward.”
Aramco’s recent worldwide oil-refinery investments in countries such as Malaysia give it a presence in a region where it could market LNG from places such as Russia, said Robin Mills, CEO of Dubai-based Qamar Energy.
He told Arab News: “(Aramco sees) Asia as at the heart of gas and oil demand growth.”
Geraldine Duffour, of France-based energy research firm Enerdata, said: “Since 2000, Saudi Arabia’s energy demand has more than doubled.”
She added: “As Saudi Arabia is keeping its domestic oil production for exports, gas has been increasingly used in the power sector (from 46 percent of power generation in 2000 to 59 percent in 2017) and total gas consumption has been rising by around 6 percent per year since 2000.”
In 2016, Aramco announced plans to double gas production within 10 years, and to develop Saudi gas fields, including shale deposits.
Al-Falih said at the India Energy Forum in New Delhi last month that Aramco was open to the idea of marketing some LNG from the proposed Russian Arctic LNG 2.
OilPrice.com reported Al-Falih as saying: “We have looked at projects in Africa and the Mediterranean, and, of course, the Arctic with some Russian companies. The idea is that Aramco will trade (LNG) globally and bring some to India and other markets.” 


Huawei warns US patent curbs would hurt global tech

Updated 39 min 30 sec ago
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Huawei warns US patent curbs would hurt global tech

  • US senator’s proposal comes amid mounting American action against Huawei
  • Huawei’s US sales of network gear evaporated after a congressional panel labeled the company a security threat in 2012

SHENZHEN, China: Chinese tech giant Huawei warned Thursday a US senator’s proposal to block the company from pursuing damages in patent courts would be a “catastrophe for global innovation.”
The proposal comes amid mounting US action against Huawei, the biggest maker of switching gear for phone carriers, amid tension over Beijing’s technology ambitions. The company has been devastated by the Trump administration’s decision to impose restrictions on its access to American chips for smartphones and other components and technology.
Disrupting Huawei’s access to US patent courts would threaten the intellectual property system that supports technology development, said Song Liping, the company’s chief legal officer.
The proposal by Sen. Marco Rubio, a Republican from Florida, followed reports Huawei Technologies Ltd. is asking for $1 billion from American phone carrier Verizon for use of the Chinese company’s patents.
“If such a legislative proposal were to be passed, it would be a catastrophe for global innovation. It would have terrible consequences,” Song said at a news conference. He said it would “break the foundation of IP protection.”
American officials accuse Huawei of facilitating Chinese spying, a charge the company denies, and see it as a growing competitive threat to US technology industries.
Huawei’s founder, Ren Zhengfei, said this month it has cut its project sales by $30 billion over the next two years due to curbs on access to American chips and other components. He said smartphone sales outside China will fall 40 percent.
Huawei’s US sales of network gear evaporated after a congressional panel labeled the company a security threat in 2012 and told phone carriers to avoid it. But the Chinese company has a patent portfolio it licenses to manufacturers and carriers.
Song gave no confirmation of how much Huawei wants from Verizon or the basis of its claims.
“Intellectual property litigations are matters that should be heard and ruled on by courts. They should not be politicized,” he said.
Huawei, founded in 1986, has China’s biggest corporate research and development budget at $15 billion in 2018. The company is a leader in developing next-generation telecoms technology.
On Wednesday, a US federal court jury in Texas ruled Huawei stole trade secrets from a Silicon Valley company but awarded no damages, saying the Chinese company didn’t benefit.
The jury rejected Huawei’s claims that Cnex Labs Inc. co-founder Yiren Huang stole its technology while he worked at a Huawei subsidiary.
Huawei’s head of intellectual property, Jason Ding, said the company was studying the verdict and deciding what to do next.
Asked about a report by Bloomberg News that some Huawei researchers had published papers with Chinese military personnel over the past decade, Song said the company wasn’t aware of its employees publishing research as private individuals.
“We don’t customize products or do research for the military,” said Song. “We are not aware of employees publishing papers. We don’t have projects of that kind.”