According to a filing with the Hong Kong Stock Exchange by China’s Sinopec, they will build gas pipelines for Saudi Aramco in a $1-billion deal.
Sinopec, a Chinese energy behemoth, announced on Thursday that it has reached an agreement worth $1.3 billion with Saudi Aramco to acquire and construct pipes to expand the natural gas distribution network in the Kingdom.
Sinopec International Petroleum Services Corporation, a wholly-owned subsidiary of Sinopec Oilfield Service Corporation, will be in charge of the in-country procurement and construction of Packages 6 and 7 of the Phase 3 Pipeline Project Clusters of the Master Gas System under the terms of the turn-key fixed-price contract worth $1.3 billion (5.17 billion Saudi riyals).
As per the contract, Sinopec expects the mechanical completion of the project to be completed by May 31, 2027, according to a filing with the Hong Kong Stock Exchange.
According to Sinopec, the Phase 3 Pipeline Project Clusters of Saudi Aramco MGS is the third stage of the company’s construction of its commodity natural gas pipeline project.
The major Saudi oil company has stated in recent years that it plans to increase natural gas production and sales in the Kingdom, reach more consumers with gas, and replace a portion of the crude oil now burned in Saudi Arabia for electricity production.
Executives earlier this year stated that Aramco, the national oil giant of Saudi Arabia, is now prepared to increase natural gas output by 60% by 2030, following the cancellation of plans to expand its oil capacity.
Along with the discovery of five reservoirs in fields that had already been found, Saudi Arabia made two major discoveries of natural gas in two fields in the Empty Quarter during the third quarter of last year.
As a result of the anticipated sharp rise in gas demand during the global energy transition, Saudi Arabia has accelerated the development of unconventional natural gas resources. By 2030, there will be a 50% increase in LNG consumption worldwide.
Aramco has also joined the global LNG market and is purportedly in talks to acquire a share in one prospective project and ink a long-term LNG offtake agreement from another proposed export facility with US LNG developers.
Recently, GreatGameIndia reported that Saudi Aramco’s $12 billion share sale last Sunday, selling 1.545 billion shares at 26.70-29 riyals each, saw immediate success, attracting keen interest from global investors.
