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    Aramco Progresses US LNG Equity Deal

Summary

The Saudi oil company is developing a gas strategy.

by: William Powell

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Natural Gas & LNG News, Americas, Middle East, Liquified Natural Gas (LNG), Premium, Corporate, Mergers & Acquisitions

Aramco Progresses US LNG Equity Deal

US Sempra Energy and Saudi Aramco have signed an interim provisional agreement for transferring equity in the US liquefaction project at Port Arthur, now under development in Jefferson County, Texas, they said January 6.

The two signed a heads of agreement in May last year for the purchase of 5mn metric tons/yr of LNG and a 25% equity investment in the Port Arthur LNG project. The definitive agreements announced remain subject to corporate approvals, the final investment decision (FID) to be taken at each party's sole discretion. The agreement sets out the mechanisms for the parties to work towards these and other pre-FID activities, they said.

"Today's announcement is a reflection of the growing alignment between our companies' interest in the overall success of the Port Arthur LNG project," said Sempra Energy CEO Jeffrey Martin. 

Saudi Aramco's CEO Amin Nasser said: "The global demand growth for LNG is expected to continue in the coming years, and we see significant opportunities in this market. This agreement with Sempra Energy is another step forward for Saudi Aramco's long-term gas strategy, and towards becoming the global leading integrated energy and chemicals company."

The initial phase of the Port Arthur LNG project is fully permitted and it is expected to include two liquefaction trains, up to three LNG storage tanks and associated facilities to enable the export of about 11mn mt/yr on a long-term basis. Earlier this year, Sempra LNG initiated the Federal Energy Regulatory Commission pre-filing review for a subsequent potential expansion of the proposed project that would add two additional liquefaction trains for a total export capacity of about 22mn mt/yr of LNG.

Port Arthur LNG is one of Sempra LNG's five strategically located LNG development opportunities in North America and is a component of Sempra LNG's goal of developing the LNG infrastructure needed to export 45mn mt/yr.

Development of Sempra Energy's LNG export projects is contingent upon obtaining binding customer commitments, completing the required commercial agreements, securing all necessary permits, obtaining financing and reaching final investment decisions, among other factors.