Saudi Aramco is reportedly working with Evercore on a restructuring that could turn its gas business into an independent division. The plan would also leave the door open for outside capital investment or, later on, a potential initial public offering. According to people familiar with the discussions, cited by Bloomberg, the Saudi oil company has hired the investment bank to analyze the deal. Deliberations are ongoing, and the structure could still change. Both Aramco and Evercore declined to comment on the process.
Saudi Aramco is considering an independent gas division
One of the options on the table is to separate the gas division from Saudi Aramco to facilitate the entry of new investors, another alternative would be to list a minority stake on the stock exchange through an initial public offering. According to the sources cited, the business could reach a valuation exceeding $100 billion, a level that would place the gas unit above the market value of Sabic, the petrochemical company controlled by Aramco.
Evercore already has a close relationship with the Saudi company, the investment bank has participated in Aramco’s strategic initiatives and was also involved in its 2019 IPO. Boston Consulting Group was also reportedly involved in drafting the plans. According to sources cited by Bloomberg, the firm recommended separating the gas operations through an initiative called “Project Gamma.”
Jafurah promotes the growth of the gas business
In parallel, the Jafurah project is emerging as one of the central pieces of the strategy of Saudi Aramco gas the company is allocating more than $100 billion to the development of this huge unconventional gas field, the project uses hydraulic fracturing techniques to produce hydrocarbons trapped in low-permeability formations, its first phase began in late 2025.
Jafurah and other developments would allow Aramco to increase its gas production by nearly 80 % during the decade ending in 2030, the company also expects to generate up to $15 billion in additional operating cash flow from this business by then. This growth helps explain the interest in granting the unit greater autonomy, an independent structure would allow for a clearer differentiation of its assets, investments, and cash-generating capacity from the traditional oil production business.
Aramco seeks to free up capital and finance new projects
The potential split also comes as the company explores various options to raise liquidity, with the company working on asset sales that could reach up to $35 billion. Among the alternatives being considered are transactions related to its real estate portfolio and stakes in terminals used for oil export and storage.
The goal would be to free up resources to finance new projects and sustain dividend payments. In this context, a potential sale of a stake in the gas division would offer another way to raise capital without Aramco necessarily having to relinquish control of the business. The transaction, however, is not yet finalized, an initial public offering (IPO) should not be considered confirmed. Sources consulted by Bloomberg indicated that discussions are ongoing and that the final structure could change.
More gas could free up crude oil for export
Beyond the potential financial value of the division, the growth in gas production would also have implications for the Saudi energy system. For years, Saudi Arabia has used oil in some of its power plants to meet high energy demand during the summer, greater gas availability would allow it to replace some of that consumption.
According to estimates compiled by Bloomberg, the new supplies could free up about one million barrels per day of crude oil that would otherwise be used for domestic power generation. This volume would then be available for export. At the same time, Aramco could have more gas available for new industrial uses and data centers, and would also have the opportunity to expand its exposure to the international liquefied natural gas market.
LNG gains importance in Aramco’s international strategy
Along those lines, the company has been building a portfolio of contracts LNG linked to international projects, including developments on the US Gulf Coast, these agreements could provide shipments that the company could market in different markets. In this way, the expansion of the gas business combines domestic production, international marketing opportunities, and a possible corporate reorganization. The eventual creation of an independent division will still depend on the decisions made by Aramco, however, the volume of planned investments in Jafurah and the expected production growth show that gas occupies an increasingly important place in the Saudi oil company’s plans.
Source: Energy Connects
Photo: Shutterstock
