June 27, 2024 [Oilprice]- Saudi Arabia’s oil giant Aramco has signed a non-binding agreement to buy LNG from Sempra’s Port Arthur LNG project and potentially acquire 25% in the project’s Phase 2, the U.S. and Saudi firms said on Wednesday.
Under the non-binding Heads of Agreement (HoA), Aramco and Sempra are set to discuss a 20-year sale and purchase agreement for LNG offtake of 5.0 million tonnes per annum (Mtpa) from the Port Arthur LNG Phase 2 expansion project. Today’s agreement further contemplates Aramco’s 25% participation in the project-level equity of Phase 2.
Phase 1 of the Port Arthur LNG project, an export terminal in Southeast Texas with direct access to the Gulf of Mexico, is currently under construction and consists of trains 1 and 2, as well as two LNG storage tanks and associated facilities. The Port Arthur LNG Phase 2 project is a planned expansion of the site to include the addition of up to two trains capable of producing up to 13 Mtpa.
“This agreement is a major step in Aramco’s strategy to become a leading global LNG player,” said Nasir K. Al-Naimi, Aramco Upstream President.
This is the second heads of agreement Saudi Aramco has signed with a U.S. LNG developer in the past two weeks.
Earlier this month, Aramco and NextDecade Corporation announced a heads of agreement for a 20-year LNG offtake deal from train 4 at the Rio Grande LNG export facility in Texas.
Aramco, the world’s top crude exporter and the world’s biggest oil firm, has been seeking a greater role on the global LNG market as it plans to ramp up its natural gas production and trading business.
Last autumn, Saudi Aramco entered the global LNG business by signing a deal to buy a minority stake in LNG company MidOcean Energy, which was in the process of acquiring interests in four Australian LNG projects.
Going into LNG trading would be another lucrative business for the Saudi oil giant, considering that LNG demand is only set to grow in the coming years as Europe ditches Russian gas and Asia looks to use more natural gas instead of coal.
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