Abu Dhabi: Saudi Aramco on Wednesday said it had reachment an agreement with the US based Sempra Energy to buy Liquefied Natural Gas to boost its presence in the global LNG markets and diversify business.
As part of the deal, Saudi Aramco will purchase 5 million tonnes per annum of LNG from Phase 1 of the Port Arthur LNG export project which is currently under development in Texas.
The total value of the deal, which is valid for 20 years is not known. The two companies are also in negotiation for a 25 per cent stake for Saudi Aramco in phase 1 of the project.
“The agreement with Sempra LNG is a major step forward in Saudi Aramco’s long term strategy to become a leading global LNG player,“ said Ameen Nasser, Saudi Aramco’s CEO & President, in a statement.
“With global demand for LNG expected to grow by around 4 per cent per year, and likely to exceed 500 million metric tonnes a year by 2035, we see significant opportunities in this market and we will continue to pursue strategic partnerships which enable us to meet rising global demand for LNG.“
Port Arthur LNG is one of Sempra’s five strategically-located LNG projects in North America with the company planning to deliver 45 million tonnes of natural gas to the global markets as the US increases production of gas due to shale revolution.
“At Sempra Energy, we are developing one of the largest LNG export infrastructure portfolios in North America, with an eye towards connecting millions of consumers to cleaner, more reliable energy sources,” said Jeffrey W Martin, chairman and CEO of Sempra Energy.
“We are pleased to partner with affiliates of Saudi Aramco, the largest oil & gas company in the world, to advance the development of Sempra LNG’s natural gas liquefaction facility in Texas and enable the export of American natural gas to global markets.”
The development comes as Saudi Aramco focuses on diversifying its business and expand globally in refinery as well as LNG business.
Last month, it reached an agreement to purchase a 17 per cent stake in South Korea’s oil firm Hyundai Oilbank for around $1.25 billion (Dh4.59 billion) to boost its presence in the refining sector.
Saudi Aramco is also investing in India’s $44 billion Ratnagiri petrochemical complex in cooperation with Abu Dhabi National Oil Company (Adnoc).