Gas Company: Detailed Analysis of the Sector in the Saudi Financial Market

The gas sector in Saudi Arabia is considered one of the fundamental pillars of the energy and national economy. The Saudi economy has traditionally relied on oil, but Vision 2030 has placed natural gas at the core of plans to diversify income and energy sources. Natural gas is used locally for electricity generation, petrochemical industries, fertilizers, and desalination plants, in addition to preparing for future export projects. The gas infrastructure in the Kingdom includes a network of main transmission lines (MGS), liquefaction facilities, and local distribution networks. Most gas production comes from Aramco projects, while petrochemical and industrial companies benefit from gas as a raw material. Current government trends focus on reducing waste, enhancing consumption efficiency, and developing new projects such as the Jafurah field, which represents a breakthrough in shale gas production. Despite the absence of independent gas companies in the financial market, the sector is an integral part of the Saudi energy system and directly affects the performance of major energy and industrial stocks.

The gas sector in Saudi Arabia witnessed significant developments during 2024 and 2025, reflected in production, consumption, and investments. Annual natural gas production in Saudi Arabia exceeded one trillion cubic feet, with annual growth ranging between 4% and 6%. Significant progress has been announced in the development of the Jafurah field, the largest unconventional gas field in the Kingdom, which is expected to support self-sufficiency and increase production capacity. In terms of prices, global gas markets experienced fluctuations following sharp increases due to the Russian-Ukrainian crisis, with prices stabilizing in the range of $300-400 per million British thermal units in 2024. Domestic demand continues to grow, driven by industrial expansion and power plants, with the Kingdom consuming 300-320 billion cubic meters of gas annually. These figures reflect the importance of gas in addressing energy challenges and transitioning to an economy less reliant on crude oil.

In the Saudi market, Saudi Aramco (symbol: 2222) stands out as the largest producer and supplier of natural gas, accounting for about a quarter of the company's total energy production. There are no independent gas companies listed on Tadawul, but petrochemical companies such as SABIC (2010), Red Sea (2223), and some chemical industry companies rely on gas as a primary raw material. Competition in this sector is concentrated among major government entities and their partnerships with international companies. Aramco is also the main distributor of gas through its network of transmission lines and liquefaction plants. Industrial companies benefit from the stability of local gas prices in their production, which reflects on their profitability and financial performance. Government trends encourage increased private sector investments in gas projects, especially with new incentives and streamlined regulatory procedures.

The financial performance of energy and gas companies in Saudi Arabia has been affected by global price fluctuations during 2024 and 2025. Aramco's net profits in 2023 reached approximately $71.7 billion, down from 2022 levels due to declining oil and gas prices. In the third quarter of 2025, Aramco recorded profits of around $26.9 billion. The dividend policy remained generous, with approximately $75 billion distributed in 2023, equivalent to an annual dividend yield exceeding 5%. The price-to-earnings (P/E) ratio for Aramco shares ranged between 12 and 14, while industrial and petrochemical sector companies remain more sensitive to gas price fluctuations. Overall, the sector remains attractive for long-term investment due to its relative stability and government support policies, despite challenges associated with global markets.

The Saudi gas sector faces several challenges, most notably the reliance on substantial capital to develop fields and infrastructure, and global gas and oil price fluctuations. Regional competition from Qatar and the UAE, and international competition from Russia and the United States, exert pressure on Saudi market share in liquefied gas markets. Additionally, the transition to clean energy requires significant investments in hydrogen technologies and carbon capture. Regulatory challenges such as environmental procedures and the need for advanced technical partnerships may slow the pace of development. Furthermore, increasing domestic demand imposes on the Kingdom the need to achieve a delicate balance between meeting internal needs and export ambitions.

Saudi Vision 2030 has placed natural gas at the heart of the strategy to diversify energy sources and national income. The Kingdom aims to reduce reliance on oil as the sole energy source by increasing gas production and consumption, and expanding investments in major projects such as the Jafurah field. Emphasis is placed on using gas for electricity generation and heavy industries, achieving savings in oil consumption and providing opportunities for future surplus exports. Government plans also include supporting innovation in clean hydrogen and encouraging the private sector to engage in gas projects through investment and regulatory incentives.

The regional gas market is witnessing intense competition between Saudi Arabia and Qatar, with Qatar leading globally in liquefied gas exports. The UAE, Iraq, and Kuwait are also striving to enhance their production capabilities. Internationally, Saudi Arabia competes with shale gas producers in America and Russia, who provide abundance in global markets. Saudi Arabia focuses on meeting domestic demand and reducing reliance on imports, with a trend towards developing liquefied gas and hydrogen export projects. Partnerships with global companies such as Shell, Total, and ExxonMobil enhance the Kingdom's technical and investment capabilities in this field.

In recent years, significant updates have been made to the regulatory policies governing the gas sector in Saudi Arabia. The government has launched several initiatives to stimulate local and foreign investment, including reducing taxes on energy projects, expediting permit issuance, and providing government guarantees for major projects. The Public Investment Fund plays an increasing role in financing gas projects, especially in electricity generation and advanced energy. Legislation has also been amended to facilitate the import of liquefied natural gas when needed, as part of a strategic plan to enhance national energy security and achieve a balance between production and consumption.

Saudi Arabia seeks to leverage natural gas as a transitional station towards a hydrogen economy. Ambitious projects for producing blue and green hydrogen have been launched, based on the abundance of local gas. The introduction of carbon capture and storage (CCS) technologies in major gas projects aims to reduce emissions and achieve environmental sustainability goals. Collaboration with international partners in developing hydrogen production facilities, such as the Saudi-Jordanian partnership, enhances the Kingdom's position as a regional source of clean energy. These initiatives support Saudi Arabia's ability to adapt to global transitions in the energy sector.

The profitability of the Saudi gas sector heavily depends on global oil and gas prices. A decline in energy prices, as occurred in 2024, leads to a decrease in profits for major companies like Aramco and affects investment plans and expansion in gas projects. Conversely, stability in prices at moderate levels enhances the financial sustainability of the sector. The Saudi government adopts policies to mitigate the impact of fluctuations by diversifying income sources and increasing local consumption efficiency. Investors in the Saudi stock market closely monitor energy price movements due to their direct implications on the financial performance of gas-related companies.

Domestic demand for gas in Saudi Arabia is witnessing an annual growth rate ranging between 5% and 10%, driven by the expansion of heavy industries, power plants, and water desalination. Government directives to consume gas instead of oil for electricity generation aim to free up more oil for export. Projects like the Jafurah field will enhance the Kingdom's ability to meet increasing demand while reducing the need for imports. In the medium term, gas consumption is expected to continue growing, with new industries emerging and the Kingdom transitioning into a regional energy and electricity hub.

The year 2024 recorded a decline in Aramco's profits due to a drop in global energy prices, with half-year profits around $93 billion, down 16% from the previous year. Conversely, the Jafurah project continued to make significant progress, with the first trial batch of gas produced by the end of 2024. During this period, international partnerships were signed to enhance gas production and marketing, and expand the regional gas pipeline network. The Public Investment Fund announced new investment plans in energy and gas projects, with regulatory facilitation to stimulate the private sector. Blue hydrogen projects also emerged as a focal point for strategic transformation in the sector.

The Saudi gas sector is expected to grow at a compound annual growth rate of between 5% and 8% until 2030, supported by new projects and increasing domestic demand. The government plans to increase the share of gas in the energy mix and reduce oil use for electricity generation. Investment in hydrogen and liquefied gas technologies will open new horizons for export and international partnerships. The listing of independent gas companies in the financial market may become possible as the sector continues to grow and expand. Amid global changes in the energy sector, gas will remain a key element in the Kingdom's strategy to achieve energy security and economic sustainability.