Saudi Aramco proposes selling gas to China to build on oil ties

Image: Saudi Aramco

Saudi Aramco wants to sell natural gas to China to help its biggest customer for oil make the transition to cleaner fuels, chief executive officer Amin Nasser said.

The Saudis, who have fought to remain among China’s largest crude suppliers, are also looking at options to develop and supply energy sources such as hydrogen and new kinds of chemicals to broaden their relationship with China, according to comments Nasser made on Wednesday to the China Development Forum.

China last month pledged to become carbon neutral by 2060. Though the country’s leadership offered little detail on how it would get there, fulfilling that pledge would mark a big shift for a major user of coal and oil. Most analysts and many oil majors predict crude use will peak long before China’s target date.

“We can also supply bridge fuels that will help meet China’s growing need for clean energy, as we expand into international gas and LNG,” Nasser said.

He added that technology to transform crude oil directly into chemicals is at “an advanced stage.” Aramco is working with Tsinghua University in Beijing on a pilot project for the catalytic transformation of oil to chemicals, he said.

Aramco’s ambition to become an international player in liquefied natural gas may take longer to realize with the company shifting its investment focus to the “long-term,” Nasser said in a conference last month. It has postponed a planned LNG export project in the U.S. and scaled back plans to build a crude-to-chemicals complex at home.

The company, which has joint-venture refineries in China and elsewhere in Asia and the U.S., is looking now to invest in similar downstream projects already under development to meet its goal of nearly doubling refining capacity to as much as 10 million barrels a day this decade.

© 2020 Bloomberg L.P.