Saudi Aramco postponed its multi-billion-dollar petrochemical and LNG projects. The decision comes as the petroleum company attempts to save money, according to several sources, as reported by Bloomberg.
Pausing Plans Worth Billions of Dollars
The oil giant, according to those familiar with the matter, is trying to preserve dividends as demand for fuel plunges, dragging down prices. So, Saudi Aramco paused its projects involving the construction of a crude processing facility, per an anonymous source in a Bloomberg report. The project is said to be worth $20 billion. The plant is supposedly located in the kingdom’s eastern region at Yanbu.
Saudi Aramco has delayed multi-billion-dollar petrochemical and LNG projects as it looks to save cash after this year’s crash in energy prices, sources say https://t.co/x4ONKR6y6a
— Bloomberg (@business) September 3, 2020
Moreover, the publication also said that Saudi Aramco is also reconsidering its intentions of purchasing a portion of the Texas LNG terminal from Sempra Energy, another source revealed. The article said that several people were already removed from the project. The acquisition of 25 percent of Sempre Energy’s terminal for liquefied natural gas would also setback the state oil company by billions of dollars.
Saudi Aramco refused to comment, Bloomberg said.
Saving Some Bucks
The move to put investments for the petrochemical plant and the LNG terminal on hold is to save money. The company wants to maintain dividends the company pledged. The payout is worth $75 billion per year for the coming years.
Bloomberg also reported that other oil companies, including giants like BP and Shell, cut shareholder dividends amid the health crisis dragging energy prices down.
Last month, the company backed out of a $10 billion project that would construct a refinery and petrochemical processing facility in China. However, the oil giant could still invest in crude processing in China.