Saudi Aramco splits gas activity amid expansion in chemicals

By on September 11, 2021 0
The Saudi state-owned energy company is splitting its gas production division in half, as fuel becomes increasingly important to grow its chemicals business and as part of efforts to position itself for the energy transition.

Saudi Arabian Oil Co will create two new divisions, named Southern Area Gas Operations and Northern Area Gas Operations, according to people familiar with the matter. The departments will be headed by Wail Al Jaafari and Jumaan Al Zahrani respectively, according to people who asked not to be identified. The nominations are pending approval by the Board of Directors.

Aramco did not immediately respond to a request for comment.

Gas is becoming increasingly important to Saudi Arabia, the world’s largest oil exporter, as it expands its chemical business, which uses fuel as a raw material. The country is also looking to convert its power plants to gas-fired plants, which could free up to 1 million barrels per day of crude for export. The kingdom is trying to position itself for the energy transition by becoming a supplier of blue hydrogen, which is made from gas. The carbon emitted during the process would then be captured.

Aramco achieved a record gas production of 10.7 billion standard cubic feet (300 million cubic meters) per day in August of last year, according to its 2020 annual report.

The company’s gas division consists of 11 processing centers with a total capacity of 16 billion standard cubic feet per day of raw gas. Production was previously managed by a division headed by Vice President Abdullah Al-Ghamdi, who has retired, according to the Aramco Weekly.

Al Jaafari and Al Zahrani will report directly to Nasir Al Naimi, senior vice president overseeing all upstream activities of Aramco, one of the people said. The new hierarchical structure will reflect the company’s crude departments, which were already divided into southern and northern zones.


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