October 3, 2023 [Oil Price]- Saudi Aramco is entering the global LNG business by signing a deal to buy a minority stake in LNG company MidOcean Energy, which is in the process of acquiring interests in four Australian LNG projects, the Saudi state oil giant said on Thursday.

Aramco has signed the definitive agreements to buy a strategic minority stake in MidOcean Energy for $500 million, which is the Saudi firm’s first international investment in LNG.

MidOcean Energy is formed and managed by EIG, an institutional investor in the global energy and infrastructure sectors, with which Aramco signed in 2021 a deal to sell a 49% stake in Aramco Oil Pipelines Company.

The LNG stake agreement announced today includes an option for Aramco to raise its shareholding and associated rights in MidOcean Energy in the future. The deal is subject to closing conditions which include regulatory approvals, Aramco said.

The Saudi giant, the world’s single largest crude oil exporter, has been looking for months to tap the global gas and LNG business and was rumored earlier this year to have been in early talks with developers aiming to secure a stake in a project in the United States or Asia.

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.

Commenting on today’s deal, Aramco Upstream President, Nasir K. Al-Naimi, said: “This is an important step in Aramco’s strategy to become a leading global LNG player.”

“MidOcean Energy is well-equipped to capitalize on rising LNG demand, and this strategic partnership reflects our willingness to work with leading international players to identify and unlock new opportunities at a global level,” Al-Naimi added.

MidOcean Energy’s initial focus is on the LNG deals in Australia, but the company believes the opportunity set is global, said Blair Thomas, EIG chairman and CEO.

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