Saudi Aramco Looks to Buy Into U.S. LNG Project

Saudi Aramco is in discussions with U.S. LNG developers to buy a stake in one planned project and sign a long-term LNG offtake deal from another proposed export facility, Reuters reports, citing sources close to the talks.

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.

Aramco is currently in talks with U.S. company Tellurian to buy a stake in its Driftwood LNG export facility near Lake Charles, Louisiana, according to Reuters’ sources, who added that representatives of the Saudi oil giant visited the project site three times this year.

Tellurian, which has struggled for years to see its project through the finish line, is said to be looking to take the final investment decision for the first two trains of Driftwood LNG before the end of this year.

The project, which has all the permits and is not affected by President Joe Biden’s pause on permitting of new LNG export facilities, received earlier this year a three-year extension of the construction permit from the Federal Energy Regulatory Commission (FERC).

Separately, Saudi Aramco is also in talks with U.S. LNG developer NextDecade to potentially seal a long-term LNG purchase deal from a proposed fifth train at the Rio Grande project, according to Reuters’ sources.

Aramco will face stiff competition from other major firms in the Middle East in its efforts for international LNG expansion. Abu Dhabi’s ADNOC, for example, has just announced two deals to buy into LNG projects overseas, including an 11.7% stake in Phase 1 of NextDecade’s Rio Grande LNG in Texas, in its first strategic investment in the U.S.

By Tsvetana Paraskova for Oilprice.com

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