Saudi Arabia’s Aramco made its first international investment in LNG last year to capitalize on rising LNG demand.
In September 2023, Aramco agreed to buy a minority stake in MidOcean Energy, the LNG unit of US-based energy investor EIG for $500 million.
Aramco recently also entered into a deal to increase its interest in MidOcean to 49 percent, and it helped MidOcean to boost its stake in LNG producer Peru LNG to 35 percent.
Moreover, Aramco previously signed a heads of agreement with US LNG exporter Sempra to buy 5 mtpa of LNG for 20 years from the second phase of the latter’s Port Arthur LNG export project in Texas.
Aramco also signed a heads of agreement with NextDecade to buy 1.2 mtpa of LNG for 20 years from the planned fourth Rio Grande LNG train in Texas.
Expanding LNG business
Speaking on Tuesday during Aramco’s third-quarter conference call, Al-Murshed said the company continued to expand its international LNG portfolio and enhance its trading capabilities, which will capture opportunities from growing gas demand.
During the call, Al-Murshed was asked to comment on the rationale behind the Peru LNG deal, as the plant’s entire offtake is booked by shareholder Shell.
“Our ambition is to create an LNG business that is tied through trading of LNG. We fully realize that the value is in the offtake, and that’s what we’re after,” he said.
Peru LNG “does not have today an opportunity for offtake, but going forward, it opens a door for us to get access to this offtake in the next few years,” he said.
“In general, we are trying to build LNG positions that give us access to offtake, and we are ramping up LNG trading capability in Aramco trading to be able to capture this value from this portfolio,” he said.
“Also, we can tie it to our domestic gas business.. We do look at it as one business,” he said.
“As we said earlier, we earmarked a considerable volume of the gas that is coming out for the production of blue ammonia, blue hydrogen,” Al-Murshed said.
Ho noted that Aramco also said that it will only proceed if the company secures commercial long-term offtake.
However, if ammonia agreements do not proceed, Aramco would also evaluate “the option of LNG to the extent that these volumes are over and above of domestic demand.”
Al-Murshed said Aramco continues to work on discussions with offtakers for blue ammonia.
However, “unless this is tied to long-term commercial offtake, we’re not able to proceed with these projects,” he said.
