Aramco in talks for US LNG projects as Mideast gas race heats up

Saudi Aramco is in talks with companies for liquefied natural gas projects in the US as it looks to the fuel for global growth at a time when rivals in the region are also expanding in the sector.

The world’s biggest crude oil exporter is in “discussions with a number of entities in the US and other regions, Chief Executive Officer Amin Nasser said on an earnings call with reporters. The company will focus on LNG internationally and look to use its gas output at home to produce blue hydrogen and power, he said, according to Bloomberg.

Aramco’s push coincides with Abu Dhabi National Oil Co. seeking to boost in global presence with major deals in chemicals and gas. While it looks for targets, the United Arab Emirates and Qatar are also betting tens of billions of dollars on expanding their LNG own export capacity. It’s a bet that cleaner-burning gas will be needed for a while, others, such as the International Energy Agency, say the outlook isn’t so rosy.

Aramco’s US approach comes amid America’s pause on approving new permits for LNG exports, which threatens to delay proposed projects in the late-2020s. The company, though, has been trying to set up LNG operations for a few years. It entered the sector with an agreement to buy a stake in MidOcean Energy for $500 million last year, that would give it assets in Australia.

The Saudi company, which is currently awaiting approvals for the transaction to close, may do more deals with MidOcean, Nasser said.

Aramco previously looked at buying 25 per cent of Sempra Energy’s Port Arthur facility in Texas. But it pulled back as the coronavirus pandemic weighed on energy demand and hammered its finances. A non-binding 20-year agreement for Aramco to sell LNG from Port Arthur expired in 2021.

While it is planning bigger gas operations, oil remains the backbone of Aramco’s business. It is seeking deals in refining and chemicals in Asia, president of the downstream unit, Mohammed Al Qahtani, said in January. Nasser reiterated on March 10 that the company was evaluating projects in China.