News Digest (www.upstreamonline.com)
Aramco's Strategic Expansion into US LNG
Saudi Arabian Oil Company (Aramco) is advancing its strategy to become a major global liquefied natural gas (LNG) player, with a specific focus on the United States. During a high-level visit, the company is expected to finalize two significant US LNG agreements, aligning with its target to secure 20 million tonnes per annum (tpa) of annual LNG capacity. These deals involve equity investments and long-term offtake commitments from new US Gulf Coast liquefaction projects.
Louisiana LNG Project with Woodside Energy
Aramco is anticipated to sign an agreement to acquire an equity stake and offtake volumes from Woodside Energy's under-construction Louisiana LNG project. This greenfield facility has a planned capacity of 16.5 million tpa, and Aramco is expected to commit to purchasing up to 2 million tpa of LNG from it. The project, which received a final investment decision in late April with a cost of US$17.5 billion, is targeting production start-up in 2029. This potential deal follows a non-binding collaboration agreement signed in May, which Woodside's chief executive stated aligns with its vision for a diverse and resilient global portfolio and leverages the relationship with a leading integrated energy company.
Commonwealth LNG Offtake Agreement
Concurrently, Aramco is expected to sign a contract to purchase up to 2 million tpa of LNG from the 9.5 million tpa Commonwealth LNG export project, located on the US Gulf coast. The Commonwealth LNG project is anticipated to take its final investment decision before the end of the year. The US Federal Energy Regulatory Commission has granted the project a four-year extension, until 31 December 2031, to complete construction and begin service.
Existing LNG Portfolio and Market Position
These anticipated deals complement Aramco's existing LNG strategy. The company already has a 20-year sale and purchase agreement with NextDecade for 1.2 million tpa of LNG from Train 4 of the Rio Grande liquefaction project. This agreement, executed in April, is priced against the Henry Hub benchmark and was sanctioned in September, with substantial completion and first deliveries expected in the second half of 2030. The new agreements with Woodside and Commonwealth LNG represent significant steps in building Aramco's targeted 20 million tpa LNG capacity.
Company Responses
In response to inquiries, a Woodside spokesperson declined to comment on market speculation, referencing only the previously announced collaboration agreement. Similarly, an Aramco spokesperson stated the company declines to comment. Commonwealth LNG was also approached for comment.
This material is an AI-assisted summary based on publicly available sources and may contain inaccuracies. For the original and full details, please refer to the source link. Based on materials by Amanda Battersby. All rights to the original text and images remain with their respective rights holders.
