Saudi Aramco Eyes US LNG Plant in New Buyout Plan

The US LNG market is anticipating new buyers from two oil giants in the Middle East -Saudi Aramco and ADNOC.

These companies are exploring opportunities to invest in US LNG projects, as they seek to expand their presence in the growing chilled gas market.

Reuters reported that Saudi Aramco is in discussions to invest in the expansion of Sempra’s Port Arthur LNG project in Texas. The project aims to add two more liquefaction units to the existing one, with a total capacity of 13.5 million tonnes per year (mtpa).

One source told Reuters that Aramco may buy part or all of the volumes from one of the new units at Port Arthur.

This would be Aramco’s second LNG investment, after it bought a minority stake in MidOcean Energy, a US-based LNG company, for $500m in September 2023.

Aramco is also interested in investing in Vietnam’s petrochemical and oil refinery projects, as the company diversifies its portfolio beyond crude oil.

Meanwhile, ADNOC is looking to acquire NextDecade’s fourth processing unit at its Rio Grande LNG export facility in Texas.

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The facility is expected to have a capacity of 27 mtpa, with the first unit starting operations in 2026.

ADNOC already has a small LNG production capacity of 5.8 mtpa in Abu Dhabi, but it wants to increase its share in the global LNG market, which is dominated by Qatar.

Qatar is the world’s largest LNG producer, with a capacity of 77 mtpa. It also has a stake in the US LNG market, as it owns 70% of the Golden Pass Export project in Texas, which will have a capacity of 15.6 mtpa when completed.

The US is currently the world’s largest LNG exporter, averaging 11.6 bcfd in the first half of 2023, according to Cedigaz data.

It surpassed Australia (10.6 bcfd) and Qatar (10.4 bcfd) in LNG exports, thanks to its abundant shale gas resources and low-cost production.

GLobalData Upstream Analyst Paul Hasselbrinck said that the US LNG market is appealing to Aramco and ADNOC, as it offers a large and uncertain supply of LNG projects.

He added that Aramco and ADNOC were late entrants to the LNG market, and they need to catch up with QatarEnergy, which has a much larger and diversified LNG portfolio.