Saudi Aramco headquarters Image Credit: Reuters

Saudi Arabian Oil Co. aims to become one of the world’s largest players in natural gas and the company is eyeing projects in Russia, Australia, America and Africa to kick-start a global business in the liquefied form of the fuel.

“Gas is a major market and we want to be one of the largest players,” Amin Nasser, the chief executive of Saudi Arabia’s state-run oil company known as Aramco, said in an interview in London. “There’s appetite to invest in natural gas and LNG.”

Asked whether Aramco would have already made a major overseas investment in gas in a year’s time, Nasser responded: “I hope so.”

Natural gas is turned into a liquid by super cooling it to minus 162 degrees Celsius (minus 260 degrees Fahrenheit). After that, the liquefied natural gas, known as LNG, gets loaded onto massive ships and transported around the world.

The liquefaction technology, which was developed commercially in the 1960s and 1970s, gave natural gas access to global markets, allowing it to reach countries from Japan to Spain.

The world’s biggest oil companies have invested heavily in natural gas and LNG, with Royal Dutch Shell Plc and Exxon Mobil Corp. operating large projects from Qatar to Australia.

In many ways, Western oil companies also see natural gas as part of their energy transition strategy: it’s far less polluting that crude oil, releasing less carbon dioxide that contributes to climate change.

The push into natural gas is a change of strategy for Aramco, which is already the world’s largest oil exporter. The company, fully owned by the Saudi government since its nationalization in the 1970s, has a relatively small natural gas business today, which focuses on meeting local demand. Nasser wants to change that, starting gas exports both from fields in Saudi Arabia but also from outside the kingdom.

“We are in discussions with Russia, Australia, America and Africa,” Nasser said, declining to name any of the companies involved in the talks. In the past, Saudi officials have said the kingdom is talking about taking a stake in a Russian project known as Arctic LNG 2 controlled by Novatek PJSC.

Saudi Arabia’s efforts to build a global natural gas business follow in the footsteps of regional rivals, including Qatar, one of the world’s largest LNG exporters. The US is also emerging as a large LNG shipper, thanks to booming natural gas production from shale fields, from Texas to Pennsylvania.

The gas shift comes as Aramco also invests heavily in oil refining and petrochemicals, in an effort to secure long-term outlets for its crude production. The company is mulling its first ever international bond later this year to help finance the acquisition of a majority stake in local chemical company Saudi Basic Industries Corp. The kingdom has promised an initial public offering of Aramco by late 2020 or early 2021, after shelving plans originally targeting 2018.