Saudis Ink LNG Accord with Shell
Saudi Aramco said March 8 it signed a number of agreements, including one with Shell relating to LNG, in the framework of Crown Prince Mohammed bin Salman's official visit to London.
State-owned Aramco said it signed a memo of understanding (MoU) with Shell "to jointly pursue international gas business opportunities, including upstream development, liquefaction projects and other aspects of the gas value chain" adding that the agreement reflects Aramco's strategy to expand its natural gas assets while acknowledging Shell's strength in LNG.
Saudi Aramco neither exports nor imports LNG but is already a large gas producer for the country's own requirements including power generation. CEO Amin Nasser outlined Aramco's goal of doubling gas output over the coming decade to reach 23bn ft³/day, when he addressed the World Petroleum Congress in Istanbul in July 2017. More recently it signed an MoU with Russian LNG producer Novatek and is reported to be interested in possible investment in Novatek's future Arctic LNG-2 project
Aramco though has no current exposure to LNG, in contrast to its neighbour and rival Qatar which continues to develop its LNG industry, with its aim announced last year to expand LNG production by 30% within seven years to 100mn mt/yr. Qatar Petroleum has LNG production joint ventures with ExxonMobil, Shell, Total and ConocoPhillips; in late 2016 a QP-Exxon joint venture, Ocean LNG, signed a LNG contract under which supplies starting 2020 will be made to a Brazilian power project venture.
Shell told NGW: "We can confirm that Saudi Aramco and Shell have signed a memorandum of understanding. This relates to the work we are doing together to support Aramco's gas ambitions. This MoU is testament to our strong bond with Saudi Aramco and our long-standing relationship with Saudi Arabia that goes back more than 75 years."
Aramco also said it also signed MoUs with London's Imperial College, The Welding Institute (TWI) and The Royal Institute of International Affairs (Chatham House) reflecting the company's "close ties to the UK and the breadth of its strategic interests." The accord with Imperial would seek to establish joint projects targeting frontier technologies and developments in chemical engineering, petroleum and geoscience, mechanical engineering and advanced materials, said Aramco. It also signed two commercial agreements in the energy sector, including one with Aberdeen-based Downhole Products to further strengthen Saudi Aramco's drilling operations.