Saudi energy minister hints at plans to export gas

An oil tank is seen at the Production facility at Saudi Aramco’s Shaybah oilfield in the Empty Quarter. (Reuters)
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Updated 17 February 2020

Saudi energy minister hints at plans to export gas

  • Saudi Aramco is in the process of taking over SABIC, the Middle East’s largest petrochemical producer

LONDON: Saudi Arabia plans to start exporting gas and will soon make a major announcement on the topic, the country’s energy minister said.

“Soon you will hear about the ability of the Kingdom to be a gas exporter and a petrochemical exporter,” Prince Abdul Aziz bin Salman said in a televised speech, S&P Global Platts reported.

The Kingdom has been investing in gas exploration as it looks to boost its industrial footprint and reduce its reliance on crude oil for domestic power generation. 

At the same time it uses natural gas as a feedstock for its massive petrochemicals industry.

Last month the Saudi energy minister told a gathering at Abu Dhabi Sustainability Week of the Kingdom’s plans to completely revamp its energy mix and rely on more gas and renewables.

“Primarily, we want to achieve it assuming that people have to give all sources of energy a fair and equitable chance as long as we mitigate these emissions,” he said.

Former Saudi oil minister Khalid Al-Falih last year announced the discovery of large amounts of gas in the Red Sea.

Saudi Aramco has announced plans to take over SABIC, the region’s largest petrochemical producer.

Saudi Arabia looks to cut spending in bid to shrink deficit

Updated 28 min 57 sec ago

Saudi Arabia looks to cut spending in bid to shrink deficit

  • Saudi Arabia has issued about SR84 billion in sukuk in the year to date

LONDON: Saudi Arabia plans to reduce spending next year by about 7.5 percent to SR990 billion ($263.9 billion) as it seeks to reduce its deficit. This compares to spending of SR1.07 trillion this year, it said in a preliminary budget statement.

The Kingdom anticipates a budget deficit of about 12 percent this year falling to 5.1 percent next year.

Saudi Arabia released data on Wednesday showing that the economy contracted by about 7 percent in the second quarter as regional economies faced the twin blow of the coronavirus pandemic and continued oil price weakness.

The unemployment rate among Saudis increased to 15.4 percent in the second quarter compared with 11.8 percent in the first quarter of the year.

The challenging headwinds facing regional economies is expected to spur activity across debt markets as countries sell bonds to help fund spending.

Saudi Arabia has already issued about SR84 billion in sukuk in the year to date.

“Over the past three years, the government has developed (from scratch) a well-functioning and increasingly deeper domestic sukuk market that has allowed it to tap into growing domestic and international demand for Shariah-compliant fixed income assets,” Moody’s said in a statement on Wednesday. 

“This, in turn, has helped diversify its funding sources compared with what was available during the oil price shock of 2015-16 and ease liquidity pressures amid a more than doubling of government financing needs this year,” the ratings agency added.