Aramco plans new gas division, eyes future unit listings, sources say

Summary

• Aramco is preparing a reorganisation that creates a standalone gas division, two sources told Reuters.
• The restructuring is designed with possible future listings of business units to raise cash.
• A gas arm would sharpen Aramco's push into liquefied natural gas beyond its crude base.

The latest

Saudi Aramco is preparing to reorganise its business around a newly created gas division, two sources with knowledge of the matter told Reuters. The restructuring is being designed with an eye on possible listings of business units in the future as a way to raise cash. Expanding in liquefied natural gas is part of the plan, the sources said.

Details

• The plan: Aramco intends to restructure its operations to carve out a dedicated gas division, according to two sources with knowledge of the matter who spoke to Reuters. The reorganisation would group gas activity into its own unit rather than leaving it distributed across the wider business.
• The cash angle: The sources said the reorganisation is being shaped with possible listings of business units in the future, intended to raise cash. No unit was identified as a listing candidate and no timing for any offering was given.
• The LNG push: Aramco aims to expand in the liquefied natural gas sector as part of the reorganisation, the sources told Reuters. LNG is natural gas cooled to liquid form for shipment, allowing producers to sell into markets that pipelines cannot reach.
• The sourcing: The account rests on two people with knowledge of the matter, speaking to Reuters. They were not named, and Aramco has not set out a public position on the reorganisation.
• What is undisclosed: Aramco has not announced a structure for the new division, named the executives who would run it, or set a date for the changes to take effect. No figure was attached to the amount of cash any listing might raise.
• The scale: Aramco is Saudi Arabia's state oil giant and the core of the kingdom's energy revenues. Any move to separate gas into its own division touches one of the largest single corporate structures in the global energy industry.
• The mechanism: Listing a subsidiary unit rather than the parent lets a company sell a slice of one business while retaining control of the whole. The sources framed the reorganisation as a step that would make such an option available in the future.

Background

Aramco's public identity has been built on crude oil, with its 2019 initial public offering priced on the strength of that output. A separate gas division would mark a structural shift in how the company organises its non-oil hydrocarbon business.

Between the lines

The two elements described by the sources fit together: a standalone gas division is the kind of structure that makes a unit listable, and the same sources tied the reorganisation to possible future offerings. That sequencing suggests the corporate redesign and the cash-raising option are being considered as one plan rather than two separate tracks, though no listing has been announced.

What's next

Watch for an Aramco statement confirming or declining to confirm the reorganisation, any disclosure of the division's leadership or launch date, and any regulatory filing pointing to a unit listing.

Source: Reuters