Global Energy Roundup: Rare Earths Push, Gas Demand Rise, Saudi Mega-Project

A strategic push for non-Chinese rare earth materials is accelerating in North America ahead of a key Pentagon deadline, according to an OilPrice.com report. REalloys (NASDAQ: ALOY) has invested $20.6 million to secure exclusive preferred rights to up to 80% of the expanded production capacity at the Saskatchewan Research Council’s rare earth processing facility in Saskatoon. The company says this secures commercial-scale output of neodymium-praseodymium (NdPr), dysprosium, and terbium that "no other Western company has secured at this scale." Engineering is underway for a REalloys-funded heavy rare earth metallization facility at the site, with commissioning on track for the Pentagon’s January 2027 ban on Chinese-origin materials.

This supply chain development is critical as the U.S. military seeks to replenish depleted inventories. A recent analysis cited by OilPrice.com estimates the U.S. has used roughly 45% of its Precision Strike Missile inventory, nearly half of its THAAD interceptors, about 30% of its Tomahawk cruise missiles, and over 20% of its long-range JASSMs. REalloys CEO Lipi Sternheim stated, "We’re seeing an integrated and sovereign North American mine-to-magnet supply chain take shape in real time."

Meanwhile, a separate OilPrice.com analysis warns that America's concurrent boom in gas-fired power generation and rising LNG exports could lead to problematic price volatility. Over 100 new gas-fired power stations are under construction in the U.S., and the Energy Information Administration projects domestic gas demand will rise 6% next year as plants enter operation. These facilities are designed to last more than thirty years, establishing a new, higher demand baseline partly driven by data center growth.

The report argues that increasing integration into the global LNG market, where the U.S. is trying to replace Russian supplies to Europe, will expose domestic prices to global shocks and conflicts, mirroring the volatility of the oil market. This could render the new generation of power plants economically challenging, despite the policy appearing to be an "own goal" that could be mitigated with export controls.

In major international project news, South Korea's Korea Electric Power Corp. (KEPCO) has won a $1.4-billion deal with Saudi Aramco, OilPrice.com reported. KEPCO will build and operate a 331-MW cogeneration facility for Phase 2 of the Jafurah gas field power plant, with operations set to begin by June 2029. The 17-year contract will supply electricity and steam to Aramco.

The Jafurah field itself is a $100-billion development, described as the largest unconventional gas project outside the United States. Saudi Aramco has launched initial production at 450 million cubic feet per day, with sustainable production expected to reach 2 billion cubic feet per day upon completion by 2030. The field holds an estimated 229 trillion cubic feet of natural gas and 75 billion barrels of condensate.