Saudi wealth fund set to issue sterling-denominated bonds

The fund aims to issue two tranches of sterling-denominated bonds with five-year and 15-year maturity dates.  
The fund aims to issue two tranches of sterling-denominated bonds with five-year and 15-year maturity dates.  
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Updated 03 June 2024
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Saudi wealth fund set to issue sterling-denominated bonds

Saudi wealth fund set to issue sterling-denominated bonds

RIYADH: Saudi Arabia’s Public Investment Fund has initiated plans to issue sterling-denominated bonds, according to Arab News sources.  

The sovereign wealth fund has mandated Barclays, BNP Paribas, HSBC, and JPMorgan to act as joint global coordinators to arrange meetings with investors starting June 3.  

According to the sources, investor calls will be followed by a sale subject to market conditions. This would be the first sterling-denominated offering by Saudi entities since 2020 and reportedly only the second ever.  

The fund aims to issue two tranches of sterling-denominated bonds with five-year and 15-year maturity dates.  

With approximately $1 trillion in assets under management, the PIF plans to increase its capital deployment to $70 billion a year after 2025, up from the current $40 billion to $50 billion.  

The fund raised $5 billion through the sale of a triple-tranche conventional bond in January and $3.5 billion from a sukuk deal in October 2023. 

Furthermore, the PIF also commenced the sale of US dollar-denominated sukuk with priority payment for a seven-year term.  

The initial indicative price for the bond sale has been reportedly set at a premium of around 115 basis points above US Treasury bonds.  

The Kingdom’s sovereign wealth fund has appointed Goldman Sachs, HSBC, and Standard Chartered to arrange meetings with potential investors. 

The sovereign fund is also spearheading sustainable efforts in the Gulf Cooperation Council region, as it raised $8.5 billion in green bond proceeds in 2023, according to Moody’s Investors Service.   


Flynas takes delivery of 53rd A320neo from Airbus

Flynas takes delivery of 53rd A320neo from Airbus
Updated 6 sec ago
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Flynas takes delivery of 53rd A320neo from Airbus

Flynas takes delivery of 53rd A320neo from Airbus

RIYADH: Saudi Arabia’s budget airline flynas has received its 53rd A320neo aircraft out of an order of 120 from Airbus as part of its strategic expansion plan.

The next-generation model airplane touched down at King Khalid International Airport in Riyadh, further consolidating the company’s position as the leading low-cost airline in the Middle East and one of the top four low-cost airlines globally, according to Skytrax.

The delivery is part of flynas’ “We connect the world to the Kingdom” mantra, which complies with the objectives of the Kingdom’s national aviation strategy to join Saudi Arabia with 250 international destinations, accommodate 330 million passengers, and host 150 million tourists yearly by 2030.


Global gas demand to rise by 2.5% in 2024, says IEA

Global gas demand to rise by 2.5% in 2024, says IEA
Updated 22 sec ago
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Global gas demand to rise by 2.5% in 2024, says IEA

Global gas demand to rise by 2.5% in 2024, says IEA
  • Combined gas demand for the Middle East region and Africa will rise 3 percent annually by 2024

RIYADH: Global gas demand is expected to rise by more than 100 billion cubic meters or 2.5 percent this year, driven by continued expansion in fast-growing Asian markets, according to an analysis. 

In its latest report, the International Energy Agency said that combined gas needs for the Middle East region and Africa will rise 3 percent annually by 2024. 

According to the analysis, global demand for gas rose by 3 percent in the first half of this year compared to the same period of the previous year.

This increased growth was well above the historical 2 percent average expansion rate between 2010 and 2020. 

Natural gas is a significant source of energy for power generation, industrial processes, and heating. It is widely considered a cleaner-burning fuel than coal or oil as the world continues its energy transition journey. 

“Natural gas markets moved to more pronounced growth in the first half of 2024, with initial estimates indicating that global gas demand increased at a rate well above its historical average during this period,” said the IEA. 

“Demand growth is primarily supported by higher gas use in industry and is increasingly concentrated in Asia, where both China and India returned to double-digit growth rates in the first half of 2024,” the Paris-based think tank added. 

The energy agency revealed that Asia witnessed an estimated 8 percent year-on-year demand growth for natural gas in the first half of this year. In comparison, it grew by a marginal 2 percent in North America during the same period. 

Combined gas demand in Central and South America grew by 3 percent in the first half of 2024 compared to the same period in 2023. 

Asia also accounted for around 60 percent of the increase in global gas requests in the first half of the year, with demands in both China and India increasing by just over 10 percent year-on-year during the same period. 

Gas use in the industrial sector contributed to almost 65 percent of global demand growth, primarily supported by the economic expansion of fast-growing Asian markets. 

“Combined industrial gas consumption in China, Europe, India and the United States – accounting for around half of the global amount – increased by an impressive 6 percent or 20 bcm year-on-year,” said the IEA. 

Gas use in the power sector grew by a more moderate 2 percent year-on-year, as the strong gains in North America, fast-growing Asian markets, and Eurasia were partially offset by lower gas-fired power generation in Europe. 

Demand in the residential and commercial sectors grew by 1 percent year-on-year in the first six months of 2024 amid unseasonably warm temperatures in the first quarter. 

Meanwhile, global supply growth of liquefied natural gas only increased marginally by 2 percent in the first three months of this year, while it contracted by 0.5 percent in the second quarter. 

The IEA noted that a combination of feed gas supply issues and unexpected outages largely drove this decline in LNG production.

“Year-on-year growth in LNG supply is expected to accelerate during the second half of 2024, with new liquefaction capacity coming online,” the agency said. “The US is set to provide the lion’s share of new export capacity this year as existing plants expand and new plants start operating.”


Oil Updates – prices ease on slowing China demand, falling US inventories cap losses

Oil Updates – prices ease on slowing China demand, falling US inventories cap losses
Updated 17 July 2024
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Oil Updates – prices ease on slowing China demand, falling US inventories cap losses

Oil Updates – prices ease on slowing China demand, falling US inventories cap losses

SINGAPORE: Oil prices eased on Wednesday, with global benchmark Brent hovering near a one-month low hit in the prior session on signs of weakening demand in China, although losses were capped by declining US oil stockpiles, according to Reuters.

Brent crude oil futures fell 15 cents, or 0.2 percent, to $83.58 a barrel by 8:20 a.m. Saudi time. US West Texas Intermediate crude futures eased 13 cents, or 0.2 percent, to $80.63.

Both benchmarks dropped in the three prior sessions, with Brent crude futures trading as low as $83.30 on Tuesday, the lowest since June 17.

While concerns over Chinese demand continue to weigh on investor sentiment, the drawdown in US inventories is a factor limiting the downside in oil prices, said Priyanka Sachdeva, senior market analyst at Singapore-based brokerage Phillip Nova.

“And steady US retail data points out that the economy is still healthy despite higher borrowing costs. This neutralizes fears of a slowdown in the US economy and fears of dented demand for oil,” Sachdeva said.

China, the world’s top oil importer, saw its economy grow 4.7 percent in the second quarter, official data showed earlier this week, the slowest growth since the first quarter of 2023.

A stronger US dollar has also weighed on oil prices, said ANZ Bank analyst Daniel Hynes in a note. The dollar index was slightly higher for a third consecutive session on Wednesday, making oil more expensive for investors holding other currencies.

In the US, the world’s largest oil producer and consumer, crude oil inventories fell by 4.4 million barrels in the week ended July 12, market sources said, citing data from the American Petroleum Institute.

Analysts polled by Reuters had estimated crude stocks would fall by 33,000 barrels. The US Energy Information Administration will release its official storage report at 4:30 p.m. Saudi time.

Also reducing oil price losses, retail sales were unchanged in June as a drop in receipts at auto dealerships was offset by broad strength elsewhere, a display of consumer resilience that bolstered economic growth prospects for the second quarter.

Meanwhile, rising geopolitical risk is also helping limit oil price declines, Growmark Energy analysts said.

A Liberia-flagged oil tanker was assessing damage and investigating a potential oil spill after it was attacked by Yemen’s Houthis in the Red Sea, the Red Sea and Gulf of Aden Joint Maritime Information Center said on Tuesday. 


Kingdom and Airbus can fly high together, says company chief

Kingdom and Airbus can fly high together, says company chief
Updated 16 July 2024
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Kingdom and Airbus can fly high together, says company chief

Kingdom and Airbus can fly high together, says company chief
  • $19 billion aviation agreement ‘will help Saudia to grow and also help the country to achieve its Vision 2030’
  • Saudia signed a deal with Airbus in May for 105 aircraft, the largest agreement in Saudi aviation history

HAMBURG: Saudi Arabia and the aircraft manufacturer Airbus can build on their $19 billion aviation agreement to expand their partnership even further, one of the company’s top managers told Arab News on Tuesday.

Airbus and Saudia airline signed a deal in May for the supply of 105 A320neo and A321neo planes, the largest aircraft agreement in Saudi aviation history.

Now Saudi Vision 2030 offers opportunities to develop the partnership, said Wouter van Wersch, president in charge of Airbus’s international operations. “I think it touches on a lot of very important points,” he said. “The whole sustainability angle, everything that the Kingdom wants to achieve in terms of energy, but also transportation, the NEOM opportunities.

 

“I think the future, airports, I think it really covers a lot of topics. And, you know, we need countries to take the lead on this.

“We, as Airbus, have a very clear strategy on what we want to do in terms of sustainability. You know, we work on innovation, bringing the best aircraft to the market today. But also tomorrow. We look at hydrogen. We look at sustainable aviation fuel. So, there’s a wide array of topics that need to be addressed and to be successful.

“You know, we've been in Saudi Arabia for a long time. We have a strong local team, of course, in commercial aircraft, but also in helicopters and in defense and space. So look, we want to do more. We are very committed to continue to work closely with the Kingdom and we’ll have to see what happens.”

 

The acquisition of the A321neo aircraft will help Saudia to grow, van Wersch said. “We have had a fantastic relationship with Saudia for many years. And I think this is a new confirmation of the partnership,” he said “You know, the first aircraft that we brought to Saudi Arabia was in the 1980s. So, it’s been a long while and we’ve gone from strength to strength.

“I think Saudia has a great vision. I think the Kingdom has a great vision on what it wants to achieve by 2030 and bringing this fantastic A321neo aircraft will really help to contribute, to satisfy and to realize this vision.

“I think the Vision 2030 of the country needs more transportation. And Airbus is a leader in aviation. So, we are very keen to contribute and look forward to great times together.”


Aramco to acquire 50% stake in Air Products Qudra’s Blue Hydrogen Industrial Gases Co.

Aramco to acquire 50% stake in Air Products Qudra’s Blue Hydrogen Industrial Gases Co.
Updated 17 July 2024
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Aramco to acquire 50% stake in Air Products Qudra’s Blue Hydrogen Industrial Gases Co.

Aramco to acquire 50% stake in Air Products Qudra’s Blue Hydrogen Industrial Gases Co.

RIYADH: Energy giant Saudi Aramco is set to acquire a 50 percent stake interest in the Jubail-based Blue Hydrogen Industrial Gases Co.

The deal, pending standard closing conditions, will also grant the firm options to purchase hydrogen and nitrogen from BHIG, a wholly-owned subsidiary of Air Products Qudra.

Saudi Aramco anticipates that its investment will help develop a lower-carbon hydrogen network in the Eastern Province of the Kingdom, serving both domestic and regional customers.

This builds on its efforts to develop a lower-carbon hydrogen business and expand its portfolio of alternative energy solutions as Saudi Arabia steadily progresses to achieve its net-zero ambition by 2060.

After the deal closes, Aramco and APQ – a joint venture between Air Products and Qudra Energy – Aramco and APQ, a joint venture between Air Products and Qudra Energy, are expected to each own a 50% stake in BHIG.are expected to hold 50 percent of BHIG between them.

“We intend to leverage our growing capabilities in carbon capture and storage, as well as our technical expertise in hydrogen, with the ambition to support the establishment of a vibrant marketplace for lower-carbon hydrogen — helping lay the foundations of a future energy system,” Ashraf Al-Ghazzawi, Aramco’s executive vice president of Strategy and Corporate Development said.

He added: “This investment highlights Aramco’s ambition to expand its new energies portfolio and grow its lower-carbon hydrogen business. We believe there are promising commercial opportunities for hydrogen with lower emissions.”

It is also expected to serve the refining, chemical, and petrochemical industries

BHIG is designed to produce lower-carbon hydrogen while capturing and storing CO2 and is set to begin commercial operations in alignment with Aramco’s carbon capture and storage initiatives.

“We look forward to providing our expertise in hydrogen and pipeline operations and supporting Aramco’s need for a reliable supply of lower-carbon hydrogen for domestic and regional requirements,” Samir Serhan, chairman of APQ said.