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Saudi Aramco talks up global gas ambitions in inaugural investor conference call

Highlights

State-owned oil company interested in US LNG

IPO timing top of mind for many market participants

Houston — Saudi Aramco continues to see overseas expansion into natural gas as a key growth driver as the state-owned oil company prepares an initial public offering and further diversifies its portfolio to weather volatility in the crude markets, an executive said Monday.

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The comments by Chief Financial Officer Khalid al-Dabbagh came during Aramco's first-ever conference call with investors. The company showed a drop in profits for the first half of the year, though its top line revenue and net income figures were strong considering lower year-over-year average realized oil prices during the period.

The call lasted only about 30 minutes, and few specifics were offered about Aramco's international opportunities, including in North America. Among other things, Aramco signed a preliminary agreement earlier this year with Sempra Energy's proposed Port Arthur LNG export facility in Texas to take a 25% stake in the project. The deal would be Aramco's first direct investment in a US LNG facility, and it would give a major lift to the terminal's hopes of advancing to construction.

"We basically look at natural gas as an area for growth for the company," Dabbagh said.

Multiple North American developers have been talking to Aramco for more than a year about supporting their LNG projects. Aramco has previously said one of its goals was to become a top LNG trader. Several global commodity traders, including Vitol and Trafigura, have been securing LNG offtake agreements from US liquefaction facilities.

Dabbagh said Aramco's goals were to expand gas activities at both home and abroad. Beyond North America, Aramco also has pursued growth opportunities in India, and it has been said to be interested in projects in Russia and elsewhere.

IPO PLANS MOVING FORWARD

Plans for the IPO, meanwhile, were moving ahead, Dabbagh said.

"The company is ready for the IPO," he said. "Now, the timing of the IPO itself is a shareholder issue, and they will announce it depending on what their perception will be of the optimal market for it."

Aramco had previously said the IPO was on track for 2021, with the completion of an agreement to acquire a 70% controlling share in Saudi Arabia's Sabic -- the Middle East's largest producer of plastics and chemicals -- being a key factor in the timing.

-- Harry Weber, Harry.Weber@spglobal.com

-- Edited by James Bambino, newsdesk@spglobal.com