Sinopec, Total express interest in Aramco gas deal -source

:Saudi Arabian oil giant Aramco is in a “listening phase” on investment proposals from refining giant Sinopec Corp and French oil major TotalEnergies for a shale gas development worth about $10 billion, a source with knowledge of the matter said on Tuesday.

Sinopec and TotalEnergies are in separate discussions to invest in the Jafurah development in Saudi Arabia, the source said, adding the talks were preliminary after formal expressions of interest took place in early 2022.

Aramco, Sinopec and TotalEnergies did not immediately respond to Reuters requests for comment.

Bloomberg News reported that active talks for a deal were taking place according to people familiar with the matter, and that the plans may include construction of facilities to export the fuel as liquefied natural gas.

Jafurah is the largest shale gas development outside the U.S., with reserves estimated at 200 trillion cubic feet of raw gas.

Thanks to a fracking method the company developed using seawater from the nearby Gulf coast, Saudi Aramco has said it expects the field to produce about 2 billion cubic feet of gas per day by 2030, at a total cost of $24 billion.

In late 2021 the company said it had signed agreements worth $10 billion for the field’s development. The kingdom’s energy ministry added at the time that it anticipated paying between $1.3-$1.6 billion for its part.

Saudi Arabia, the world’s top crude oil exporter, has been battling for market share with rapidly expanding shale oil producers in the United States, which in just a decade have developed capacity to pump millions of barrels per day of oil from rock formations previously too costly to tap.

Initial plans had been for Jafurah gas to satisfy domestic demand as a priority, potentially freeing up some 800,000 barrels per day of crude and fuel for export that would have normally been burned at home for electricity.

But Aramco CEO Amin Nasser has also mulled using Jafurah to position itself as a major gas exporter, making use of existing pipelines to nearby countries rather than developing costly liquefied natural gas export terminals.