DUBAI: Saudi Aramco agreed to buy liquefied natural gas from Sempra Energy’s Texas export terminal and will discuss taking a stake in the project.
The deal, if completed, would be the first long-term LNG purchase by Saudi Arabia’s state oil giant, giving the company access to gas that it can ship home for use in power plants or trade on global markets.
Aramco and Sempra signed an initial agreement to negotiate further aspects of the deal. The companies didn’t disclose the value of the potential transaction.
Saudi Arabian Oil Co., as Aramco is officially known, said it would buy 5 million tons of LNG a year from Sempra over 20 years. The gas will be produced from Phase 1 of Sempra’s Port Arthur LNG project.
The companies also agreed to negotiate Aramco’s purchase of a 25% stake in that phase.
Aramco traded its first LNG cargo in March and said it is seeking gas resources in the U.S., Russia and Australia. The company is the world’s biggest crude exporter but it has struggled to tap enough of its ample gas resources to meet growing domestic demand.
LNG is gas that is super-chilled until it turns to liquid and can be transported by tankers. - Bloomberg