Saudi Arabia’s state-owned oil company has struck a nonbinding agreement to purchase liquefied natural gas from a planned export terminal in Texas.
Saudi Aramco’s deal with Sempra — the developer of the Port Arthur LNG Phase 2 project — is its second with a U.S. company in as many weeks. The agreements add momentum behind LNG expansion projects that are still trying to reach their final investment decision, a crucial development milestone, and speak to Aramco’s growing interest in U.S. LNG.
Under the “heads of agreement” deal announced Wednesday, Aramco said it would purchase 5 million metric tons of LNG annually for 20 years from the second phase of the Port Arthur LNG project, located in Texas’ Jefferson County. The agreement also “contemplates” Aramco buying a 25 percent stake in the expansion project, according to a joint press release from the companies.
“As a potential strategic partner in the Port Arthur LNG Phase 2 project, Aramco is well placed to grow its gas portfolio with the aim of meeting the world’s growing need for lower-carbon sources of energy,” said Nasir Al-Naimi, president of Aramco’s upstream business, in the release. “This agreement is a major step in Aramco’s strategy to become a leading global LNG player.”
