Aramco Services Company, a subsidiary of Saudi Aramco, has entered into an initial agreement to purchase 5 million tons of liquefied natural gas (LNG) per year for 20 years from Sempra LNG, a subsidiary of San Diego–based Sempra Energy.
The value of the transaction was not disclosed.
The proposed agreement would also grant Aramco Services Company a 25 percent equity investment in phase 1 of the Port Arthur LNG project.
The LNG offtake would come from phase 1 of the Port Arthur LNG, a natural gas liquefaction and export terminal project under development in Southeast Texas.
Phase 1 of the Port Arthur LNG project is said to include two liquefaction trains, capable of producing up to 13.5 million tons per year, and the construction of new natural gas pipelines. With the capabilities to reach eight liquefaction trains, Port Arthur LNG could become one of the largest export projects in North America, according to a May 22 Saudi Aramco statement.
Sempra LNG is working to develop five “strategically located” gas liquefaction projects across North America — including Port Arthur LNG — with a goal of providing 45 million tons per year of natural gas to the global market. Sempra Energy had revenue of more than $11.6 billion in 2018.
Saudi Aramco, formerly Saudi Arabian Oil Co., is represented in three major global energy markets — Asia, Europe and North America — according to the Saudi Aramco website.
In April, Bloomberg reported that Saudi Aramco is also in talks to buy Royal Dutch Shell’s 50 percent stake in Saudi Aramco Shell Refinery Co.
If the agreement with Sempra LNG moves forward, it reportedly will be a major step forward in Saudi Aramco’s long-term goal of becoming a leading global LNG player.