SINGAPORE/BEIJING: Qatar is in talks to make Chinese firms partners in its liquefied natural gas expansion project, the world’s largest, in a shift from the Gulf state’s reliance on western majors for technology and global outreach, industry sources said.
Since the early 1990s, Qatar has depended on international companies, including ExxonMobil, Royal Dutch Shell and Total, to help it to build its LNG industry. In exchange, the Western majors received lucrative long-term supply contracts.
But the US shale gas revolution and increased focus on renewable energy as pressure mounts to tackle climate change has curbed the West’s appetite for gas.
Three sources familiar with the matter told Reuters state energy giant Qatar Petroleum (QP) was in talks with Chinese state firms, including PetroChina and Sinopec , for equity stakes in Qatar’s $28.7 billion North Field expansion, the world’s biggest single LNG project.
Western majors ExxonMobil, Shell, ConocoPhillips, Total, Chevron and Eni have also been invited to bid for a share.
The sources spoke on condition of anonymity because the matter is private, although CNOOC Ltd’s CFO Xie Weizhi said last month the firm was “very interested” in Qatar’s gas projects.
It was unclear how advanced the talks were. One of the sources said PetroChina was discussing a 5 percent stake.
Biggest meets fastest
The North Field expansion should allow Qatar to strengthen its position as the largest LNG exporter, with output of 110 million tons per annum (mtpa) by 2026, a 40 percent increase.
The second largest exporter Australia has been closing the gap with Qatar through new gas projects in recent years.
Refinitiv Eikon shiptracking data showed Australia exported 77.3 million tons in 2020 compared with Qatar’s 77.6 million tons.
Although not carbon free, natural gas is less polluting than coal and China is expected to use it to replace coal in winter heating, electricity generation and industry to curb its emissions.
As a result, China is expected by next year to overtake Japan as the world’s biggest LNG importer.
China has already agreed supply deals and invested in producers such as Russia and Mozambique and is keen to diversify from Australian LNG following a deterioration in bilateral ties.
For its part, Qatar has courted China, whose gas demand accounted for about 8.3 percent of the world’s total in 2020 and is expected to grow by 8.6 percent in 2021 to 354.2 billion cubic meters, data from CNPC’s research institute showed.
Saad Al-Kaabi, Qatar’s energy minister and the head of QP, has met Zhang Jianhua, director of China’s National Energy Administration several times since 2018 to discuss cooperation.
Sinopec and Qatar signed two long-term deals, one last year and one earlier this year, following which Sinopec set up an office in Doha.
“China is the fastest growing market and is looking into long-term contracts to secure supply,” Carlos Torres Diaz from Rystad Energy consultancy said. “So moving deals to China would make a lot of sense for Qatar.”
Able to stand alone?
The western energy companies’ expertise and investment helped to make Qatar the world’s richest country on a per capita basis and to build up a sovereign wealth fund holding more than $350 billion in assets.
Now the joint LNG projects are established, Qatar is in a position to move forward without them.
One person involved in the talks said QP’s Kaabi told energy majors in meetings over the last months that it no longer depended on them to fund new projects.
Qatar was not necessarily dispensing with them, but would be seeking terms more favorable to it, the person said.
Last month, it decided not to extend its joint-venture contract for the Qatargas 1 LNG plant, with ExxonMobil, Total and Japan’s Marubeni and Mitsui after the 25-year contract expires in 2022.
Sources from Total and ExxonMobil told Reuters on condition of anonymity the companies had expected to negotiate an extension.
Mitsui and Marubeni both said they respected QP’s decisions and Mitsui also said it was interested in participating in the expansion.
Exxon spokesman Todd Spitler told Reuters the company looked forward to “continuing success” in future projects with QP and the state of Qatar.
“ExxonMobil affiliates are working with Qatar Petroleum to identify international joint venture opportunities that further enhance the portfolio of both,” he said.
Of the foreign partners, Exxon has the highest exposure to the country with access to 15.4 million tons per annum of Qatari gas, followed by Shell at 2.4 mtpa and Total at 2.3 mtpa. For Exxon, Qatar represents over 60 percent of its LNG sales volumes.
Western energy analysts say Qatar still has a use for the big, listed Western players, although it has less need for their direct investment.
Of the other companies with interest in Qatar, Chevron, and Total had no comment and PetroChina and Sinopec did not respond to requests for comment. QP also did not comment.
ConocoPhillips said it was preparing a competitive bid for the North Field expansion and an Eni spokesman also said it was considering a bid.
“International partners, especially the majors, remain key to helping Qatargas secure LNG off-take and global market access,” Valery Chow from Wood Mackenzie consultancy said. “QP doesn’t need foreign balance sheet funding for new projects.”
Having made a final investment decision on the expansion, Qatar is effectively building the North Field expansion project alone.
Kaabi has said Qatar has the muscle to continue without help, but would prefer to have partners to boost its global outreach and strengthen long-term deals.
It could also have political incentives to maintain ties as it considers a second phase of the expansion, which sources expect will be announced later this year and would increase its LNG capacity to 126 mtpa by 2027.
The value of Qatar’s US links was underscored as Washington helped it to resolve a row with Saudi Arabia, which ended early this year.
But the ties could be maintained with US companies taking a smaller share of Qatar’s LNG than in the past and through international connections.
The Western majors have over the last two years sold QP stakes in assets around the world, including exploration projects in Argentina, Brazil and Mozambique.
But they have not handed Qatar the kind of long-term deals in fast-growing Asian markets that the Chinese energy firms can deliver and Qatar regards as a priority, the sources said.
Qatar pivots to LNG-hungry China in strategy shift
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Qatar pivots to LNG-hungry China in strategy shift

- US shale gas revolution and increased focus on renewable energy as pressure mounts to tackle climate change has curbed the West’s appetite for gas
Closing Bell: Saudi main index ends lower at 11,303

- MSCI Tadawul 30 Index lost 19.78 points to close at 1,441.01
- Parallel market Nomu declined 110.94 points to end at 27,417.62
RIYADH: Saudi Arabia’s Tadawul All Share Index closed in the red on Wednesday, falling 134.5 points, or 1.18 percent, to settle at 11,303.68.
The total trading turnover reached SR4.37 billion ($1.16 billion), with 37 stocks advancing and 206 declining.
The MSCI Tadawul 30 Index also dropped, losing 19.78 points, or 1.35 percent, to close at 1,441.01.
The Kingdom’s parallel market Nomu declined by 110.94 points, or 0.40 percent, to close at 27,417.62, with 26 stocks gaining and 49 retreating.
The best-performing stock of the day was Saudi Arabia Refineries Co., rising 4.38 percent to SR69.10.
Other top gainers included Perfect Presentation for Commercial Services Co., whose share price rose 3.37 percent to SR11.66, and SHL Finance Co., which gained 2.22 percent to SR20.30.
The day’s largest decline was seen in National Gypsum Co., with its share price dipping 4.76 percent to SR20.4.
ACWA Power Co. saw its shares drop 4.40 percent to SR274, while Al-Rajhi Co. for Cooperative Insurance declined 4.17 percent to SR115.
On the announcements front, ACWA Power said it has received approval from the Capital Market Authority to proceed with a SR7.12 billion capital increase through a rights issue.
The CMA’s decision, issued on May 20, allows the company to offer, register, and list rights issue shares — pending shareholder approval at an upcoming extraordinary general assembly.
The rights issue was first disclosed on Dec. 19, when ACWA Power submitted its application to the CMA.
Alinma Bank has successfully completed a $500 million issuance of dollar-denominated sustainable Additional Tier 1 capital certificates under its Tier 1 Capital Certificate Issuance Programme.
The offering targets eligible investors in Saudi Arabia and internationally, with settlement expected on May 28.
The issuance comprises 2,500 certificates, each with a par value of $200,000, offering an annual return of 6.5 percent. These perpetual instruments are callable after 5.5 years.
The certificates will be listed on the International Securities Market of the London Stock Exchange and were offered exclusively under Regulation S of the US Securities Act of 1933.
During Wednesday’s session, Alinma Bank shares rose 0.18 percent to close at SR27.50 on the main market.
Flynas has set the final offer price for its initial public offering at SR80 per share following the successful completion of the institutional book-building process, which was oversubscribed by 99.8 times, according to a statement.
BSF Capital, Morgan Stanley Saudi Arabia, and Goldman Sachs Saudi Arabia, acting as joint financial advisors, co-underwriters, and joint bookrunners for the IPO, confirmed that institutional investors subscribed in full to the 51,255,568 ordinary shares allocated in the first phase, representing 100 percent of the total offered.
Following this, up to 20 percent of the total offering will be allocated to retail investors in the second phase of the IPO.
Saudi Fransi Capital, serving as lead manager, announced that all necessary arrangements have been completed with receiving agents to facilitate the individual subscription process, which will run for three days from May 28 until June 1 at 12:00 p.m.
Saudi Arabia’s PIF halts Swiss financial market investments over Credit Suisse fallout

- Decision driven by how Swiss regulators handled 2023 government-backed rescue of Credit Suisse by UBS Group
- PIF continues to expand footprint across Europe, signaling redirection of capital
RIYADH: Saudi Arabia’s Public Investment Fund will no longer allocate capital to Switzerland’s financial markets, two years after suffering losses from the collapse of Credit Suisse.
During the FII PRIORITY Europe Summit in Albania, PIF Gov. Yasir Al-Rumayyan said that the decision was driven by the manner in which Swiss regulators handled the 2023 government-backed rescue of Credit Suisse by UBS Group, reported Bloomberg.
The abrupt deal was executed without shareholders’ approval, impacting investors across the Middle East.
PIF, one of the world’s largest sovereign wealth funds, is reassessing its investment strategy amid growing concerns over regulatory stability and investor protection.
The fund’s decision to halt investments in Switzerland’s financial markets marks a significant shift in its approach, underscoring the long-term impact of the 2023 Credit Suisse collapse on regional and institutional investor confidence.
PIF also continues to expand its footprint across Europe, signaling a redirection of capital.
“We’re not going to invest in the financial markets in Switzerland. If you change something overnight and wipe out all of your investors, this is a big red flag,” Al-Rumayyan said, as reported by Bloomberg.
The remarks were made during an on-stage discussion with Noel Quinn, newly appointed chairman of Zurich-based Julius Baer Group Ltd.
Quinn responded: “As the chairman of a Swiss bank as of 10 days ago, that concerns me.”
The 2023 acquisition of Credit Suisse was finalized rapidly following a sharp decline in its stock price.
The plunge became worse after the former chairman of the Saudi National Bank, Ammar Al-Khudairy, said the bank would “absolutely not” be open to further investments in Credit Suisse.
“The deal didn’t receive approval from either Credit Suisse or UBS shareholders as regulators and lawmakers rushed to contain a crisis of confidence that was spreading across global markets,” according to Bloomberg.

At the time, shareholders from the Middle East, including SNB and the Qatar Investment Authority, collectively held around 20 percent of Credit Suisse.
SNB, which was the largest shareholder in the Swiss lender, had called on Credit Suisse to reject the offer from UBS, Bloomberg reported.
Other investors had cautioned that the Swiss government’s decision to override standard merger procedures and sideline shareholder votes could deter institutional investors.
Legal analysts also warned that the rushed nature of the transaction had undermined Switzerland’s standing as a reliable investment destination where the rule of law is safeguarded.
Al-Rumayyan’s remarks came as PIF announced plans to open a subsidiary office in Paris and committed to doubling its investments in Europe to $170 billion by the beginning of the next decade.
The fund has already deployed approximately $85 billion across the region between 2017 and 2024, making strategic investments in key European economies, including the UK, France, and Italy.
Saudi Arabia and Kyrgyzstan announce establishment of a joint business council

- Forum reviewed investment opportunities, advantages, and incentives in Saudi Arabia and Kyrgyzstan
- Bilateral meetings were held between company representatives from both countries
BISHKEK: Saudi Arabia and Kyrgyzstan, represented by the Saudi Chambers Federation and the Kyrgyz Chamber of Commerce and Industry, announced the signing of an agreement to establish a Saudi-Kyrgyz Joint Business Council — a significant step to advance economic cooperation between the two countries.
The signing ceremony took place on the sidelines of the Saudi-Kyrgyz Business Forum held on May 21 in Bishkek, the Kyrgyz capital, in the presence of Kyrgyz Minister of Economy and Commerce Bakyt Sydykov, Saudi Chambers Federation Chairman Hassan bin Muajab Al-Huwaizi, and several ministers and officials from both nations, the Saudi Press Agency reported.
The forum was also attended by Saudi-Kyrgyz Business Council Chairman Ahmed Al-Dakhil, Saudi Arabia’s Ambassador to Kyrgyzstan Ibrahim bin Radi Al-Radi, Kyrgyzstan’s Ambassador to Saudi Arabia Ulukbek Maripov, along with more than 100 investors.
The chairman of the Saudi Chambers Federation emphasized that the establishment of the joint business council is the result of sustained efforts and mutual desire, providing an effective platform for Saudi and Kyrgyz businessmen to showcase and promote their activities and build commercial partnerships, amid vast opportunities for cooperation between the two countries.
The joint business forum reviewed investment opportunities, advantages, and incentives in Saudi Arabia and Kyrgyzstan across sectors including exports, healthcare, pharmaceuticals, banking, hydropower, agriculture, and technology.
Bilateral meetings were also held between company representatives from both countries.
Notably, the federation’s delegation visits to Kyrgyzstan included a series of meetings with government and private sector officials to discuss prospects for economic cooperation and explore investment opportunities.
Saudi crude output hits 8.96m bpd in March: JODI data

- Crude exports fell by 12.11% month on month to 5.75 million bpd
- Kingdom’s slight increase in crude production came amid a broader strategic pivot within OPEC+
RIYADH: Saudi Arabia’s crude oil production rose to 8.96 million barrels per day in March, reflecting a 0.11 percent monthly increase, according to the latest Joint Organizations Data Initiative data.
According to the database, crude exports fell by 12.11 percent month on month to 5.75 million bpd.
Refinery crude exports rose 10.3 percent during this period to 1.55 million bpd. The uptick was driven primarily by diesel shipments, which jumped 20.66 percent from the previous month to 806,000 bpd.
It also accounted for the largest share of refined product exports in March at 52 percent, followed by motor and aviation gasoline at 17 percent, and fuel oil at 12 percent.
Total refinery output reached 2.94 million bpd in March, a 12.32 percent monthly increase, with diesel comprising 42 percent of refined products, motor and aviation gasoline 24 percent, and fuel oil 15 percent.
Domestic demand for refined petroleum products increased by 223,000 bpd in March compared to the previous month, reaching 2.22 million bpd.
On an annual basis, demand rose by 5.07 percent, equivalent to 107,000 bpd.
The Kingdom’s slight increase in crude production across the month came amid a broader strategic pivot within OPEC+, which has agreed to significantly boost oil output starting in June. The alliance announced an additional 411,000 bpd increase for June, following a similar adjustment made for May.
This marks a continuation of the group’s recent efforts to accelerate the return of previously curtailed supply to the global market. The upcoming increase is expected to add further downward pressure on prices, which have already been trending lower due to ample inventories, modest international demand growth, and increasing non-OPEC output.

Direct crude usage
Saudi Arabia’s direct crude oil burn rose to 383,000 bpd in March, reflecting a 35.3 percent increase from the previous month.
Direct crude burn refers to the use of unrefined crude oil for electricity generation, rather than for export or refining.
The increase came amid the seasonal ramp-up in cooling needs as temperatures begin to rise heading into the warmer months.
Although the Kingdom has made substantial progress in expanding its natural gas infrastructure to reduce reliance on direct crude burn, fluctuations still occur, particularly in transitional months like March, when energy demand begins to shift but supply systems have not fully ramped up.
Saudi Arabia launches BAE Systems Arabian Industries to localize defense manufacturing

- Company results from the merger of two major players in the defense ecosystem
- Merger was finalized nearly four months ago to consolidate operational strengths
JEDDAH: Defense manufacturing is set to advance in Saudi Arabia with the launch of BAE Systems Arabian Industries, a new entity aimed at accelerating localization and strengthening the Kingdom’s military industrial base.
The company results from the merger of two major players in the defense ecosystem — BAE Systems Saudi Development and Training, which focuses on capability building, and the Saudi Maintenance and Supply Chain Management Co., a provider of supply chain and technical services, the Saudi Press Agency reported.
The move marks further progress in the Kingdom’s push to expand its defense capabilities, with localization of military spending rising to 19.35 percent in 2024, up from just 4 percent in 2018. The Kingdom aims to surpass 50 percent by 2030, in line with Vision 2030’s goal of a self-sufficient defense sector.

Ahmad Abdulaziz Al-Ohali, governor of the General Authority for Military Industries, inaugurated BAE Systems Arabian Industries at an official ceremony held at the company’s new headquarters in Riyadh, attended by several officials and defense industry leaders.
In a post on his X handle, the governor said: “This will enhance local content and open up broad horizons for national and international companies to contribute to building a solid and sustainable military-industrial system, to enhance local content in terms of human and technical cadres.”
The merger was finalized nearly four months ago to consolidate operational strengths and leverage over three decades of experience in defense training, capability development, and logistics.

“He pointed out that the integration of national and global expertise within this unified entity reflects the confidence of major companies in the attractive investment environment provided by the authority in cooperation with its partners in both the public and private sectors,” the SPA report stated.
Al-Ohali noted that the initiative would play a key role in transferring knowledge and building national expertise, supporting the Kingdom’s goal of localizing over 50 percent of military spending by 2030.
He reaffirmed the authority’s support for initiatives that boost local content and create opportunities for both national and international companies to help build a strong and sustainable military-industrial sector.

In a LinkedIn post, Abdulatif Al-Shaikh, the new company’s CEO, said: “We are guided by a clear vision to be the leading Saudi company in the defense sector by supporting and developing capabilities within the Kingdom and across the region, in alignment with Vision 2030.”
In another development, Saudi Arabia recently completed production of its first locally manufactured components for the Terminal High Altitude Area Defense, or THAAD system launcher, in Jeddah.
This follows localization agreements signed during the 2024 World Defense Show and reflects increasing technical collaboration with global defense firms such as Lockheed Martin.