The state-run company is considering investing in Equinor’s Marcellus shale operations through a joint venture or by buying a stake.
Wednesday 08, May 2019
(Bloomberg) --Saudi Aramco is weighing a potential investment in Norwegian oil company Equinor’s US shale operations in what could be the energy giant’s first ever overseas venture for gas exploration.
Aramco may also invest with other oil companies to gain access to US shale gas.
No final decisions have been made and the deliberations between Aramco and Equinor are at an early stage. Aramco is expanding its search for gas to help reduce the nation’s reliance on sales of crude.
Saudi Arabia wants to use gas as fuel in the Kingdom’s power stations and for the production of petrochemicals, a high-priority industry for the government in its strategy to diversify the economy.
Khalid Al-Falih, the Saudi Energy Minister, said that the country is looking for natural gas supplies in the US, Russia’s Arctic and Australia both to supply global markets and meet demand at home.
A partnership with Aramco will give the Norwegian company more firepower to expand in the US. Equinor has been chasing deals for natural gas-rich acreage to add to its large position in the Appalachian region.
Additionally, the oil firm is also considering selling all or some of its operations in the Eagle Ford shale in the US.
Aramco plans to double its total gas production to 23 billion cubic feet daily in the coming decade, said Amin Nasser, Saudi Aramco’s Chief Executive Officer.
The company’s trading unit sold its first liquefied natural gas (LNG) cargo last month in the latest example of Saudi Aramco’s effort to expand outside its historical business of pumping and selling crude.