Aramco mulls gas plant divestment as state seeks more payouts
The state-backed oil company is considering selling four to five gas-fired plants that supply energy to its refineries, a move that could generate around US$4 billion, according to two sources familiar with the matter. The plan reflects increasing pressure on Aramco to boost profitability and maintain payouts to the Saudi government amid lower oil revenues.
Saudi Aramco, the world's most profitable company and the kingdom's economic backbone, has been reviewing its portfolio in recent months to streamline operations and reduce costs, as previously reported.
The company is also set to cut its dividend payouts by nearly a third this year, hit by declining oil prices. These payouts — which include royalties and taxes — are vital to the government, which directly owns 81.5 percent of Aramco.
The power plant divestments are part of a broader fundraising effort. According to two of the sources, in addition to the energy assets, Aramco could also sell housing compounds, pipelines, and potentially port infrastructure. A third confirmed that the ports may be included.
Aramco declined to comment on the prospective asset sales or on how much money the company expects to raise. The Saudi government's communications office did not respond to Reuters' requests for comment. A timeline for the sales was not confirmed, and all three sources requested anonymity due to the private nature of the process.
One of the sources noted that local Saudi utility firms could emerge as potential buyers.
According to Aramco's 2024 financial report, the company owns or co-owns 18 power plants and related infrastructure across Saudi Arabia that support operations at gas plants and refineries. Additional facilities, such as the Tanajib Gas Plant, are expected to begin operations later this year.
These possible sales come as Crown Prince Mohammed bin Salman continues to pursue large-scale domestic initiatives to shift Saudi Arabia's economy away from its heavy oil dependency. The economic diversification push includes investments in high-profile events like Expo 2030 and the FIFA World Cup 2034, alongside infrastructure mega-projects.
Still, oil remains central to state finances. Last year, 62 percent of government revenues came from oil, and despite Aramco's $199 billion contribution, the 2024 Saudi budget shows a deficit of over $30 billion.
To support the country's fiscal needs, Aramco has also turned to debt markets. In May, it raised $5 billion via bond sales and hinted at further borrowing to finance infrastructure and meet capital demands.
Aramco is seeking external investors to help fund infrastructure projects as it navigates shifting global energy dynamics and internal economic pressures.
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