Saudi Aramco Considers $100 Billion Gas Division Spin-Off

2026-09-27 companies

Riyadh, Sunday, 27 September 2026.
Saudi Aramco is exploring a major structural overhaul, code-named Project Gamma, that could separate its gas operations into a standalone entity valued at over $100 billion. Assisted by Evercore and Boston Consulting Group, the state energy giant is considering a potential public listing or minority stake sale for the new division. The strategic move aims to unlock substantial business value as Aramco aggressively expands domestic gas production, notably through its $100 billion Jafurah field development. By boosting gas output 80% by 2030, Aramco expects to generate $15 billion in incremental operating cash flow while freeing up 1 million barrels per day of crude oil previously burned for domestic power generation, redirecting it toward lucrative international exports. Concurrently, the company is weighing up to $35 billion in asset sales to fund state projects and sustain dividend payouts.

Market Performance and Valuation Metrics

Investor reaction to the restructuring news was reflected in trading activity on the Saudi Exchange on Sunday, 27 September 2026. Saudi Aramco stock closed at SAR 25.82, marking a +0.16% change on the day with a trading volume of 6,020,907 shares [1]. Despite the daily gain, the stock has experienced volatility, trading at a discount relative to its 52-week high of SAR 27.96 recorded earlier in the year [5]. Based on the closing price of SAR 25.78 on 24 September 2026, the stock traded approximately 7.797 percent below its yearly peak, indicating cautious market sentiment amidst regional tensions [4][5]. Financial valuation metrics for 2026 indicate a price-to-earnings ratio of 13.2x and a dividend yield of 5.39%, providing a yield buffer for investors monitoring the transition [1]. The company’s market capitalization stood at approximately SAR 6.50 trillion as of late September 2026, underlining its significant weight in the global energy sector [4][5].

Project Gamma and Gas Expansion Strategy

The proposed restructuring, internally designated as Project Gamma, involves hiring Evercore Inc. to advise on separating gas operations into a standalone division [2][7]. Boston Consulting Group has also advised on the initiative, which aims to unlock value through a potential initial public offering or minority stake sale valued at over $100 billion [2][3]. This strategic pivot supports Aramco’s plan to invest more than $100 billion into the Jafurah unconventional gas field, with the first phase commencing operations at the end of 2025 [7]. The company targets an 80% increase in gas production through 2030, aiming to generate up to $15 billion in additional operating cash flow from the business by that date [2][7]. By diverting natural gas to domestic power generation, Aramco intends to free up 1 million barrels per day of crude oil previously burned domestically, redirecting it toward higher-margin international exports [7]. To further bolster liquidity for state projects and dividends, the energy giant is exploring asset sales of up to $35 billion, including stakes in oil export terminals and real estate [2][7].

Security Risks and Operational Continuity

Operational stability faces scrutiny following security incidents in late September 2026. On 24 September 2026, reports emerged of intercepted ballistic missiles and claims by Houthi forces targeting Aramco facilities in Yanbu, a key alternative export route when the Strait of Hormuz is disrupted [4][7]. These events occurred during a period of heightened regional hostility, with air raid alerts recorded in Riyadh earlier in the month [7]. Despite these risks, Aramco reported robust first-half 2026 adjusted net income of SAR 251.9 billion, supported by total hydrocarbon production of 11 million barrels of oil equivalent per day [4]. The second-quarter 2026 base dividend was declared at SAR 82.1 billion, scheduled for payment on 27 August 2026, representing a 3.5 percent increase from the prior year [4]. Investors are now weighing these strong cash flows against the logistical risks associated with export continuity and infrastructure security in the Red Sea region [4][7].

Sources

Energy Markets Saudi Aramco