The aim of state owned Saudi Aramco to become a major player in the growing international gas market, it would be purchasing liquefied natural gas from San Diego, United States-based utility Sempra Energy. An agreement to the effect was recently signed between Sempra LNG and Aramco Services Company, both of which are subsidiaries of the two companies.
According to the agreement, 5 million tons per year of LNG for the next 20 years would be sold to Aramco by Sempra. The companies however said that further negotiation and finalization of the agreement is pending.
“If converted to a sales and purchase agreement (SPA), this will be one of the largest LNG deals ever signed and the largest deal signed since 2013,” said Giles Farrer, research director at energy and minerals consultancy Wood Mackenzie.
The first phase of Sempra’s Port Arthur LNG facility in Texas, which is currently being development, would be the sources of the supplies. Aramco would also make a 25% equity investment in the facility according to the deal.
Sempra is among a number of US shale gas companies that are trying to develop US facilities to export LNG which is natural gas cooled to a liquid form for transportation and the agreement with Aramco would boost those efforts of the company. The export terminals for LNG are multi-billion dollar projects and therefore customers needed to be lined up by LNG developers for financing such projects. Analysts now expect that Sempra will green light the Port Arthur facility now that it has struck an agreement with Aramco.
Previously, an 20 year agreement to sell 2 million tons per year to the Polish Oil and Gas Company from Port Arthur was struck by Sempra. Sempra will have assured customers for about 7 million tons of the 11 million tons per year of capacity at Port Arthur after the completion of the Aramco deal.
There were reports earlier that an investment in a U.S. LNG facility was being sought to be made by Aramco. The company CEO Amin Nasser said in a press statement that Aramco has been pursuing a long-term strategy to become a leading LNG player globally which would be boosted by its arrangement with Sempra.
“With global demand for LNG expected to grow by around 4% per year, and likely to exceed 500 million metric tons a year by 2035, we see significant opportunities in this market and we will continue to pursue strategic partnerships which enable us to meet rising global demand for LNG,” the CEO said.
Aramco wants to double its total gas production to 23 billion cubic feet per day over the next 10 years and to achieve that end, the company has been contemplating partnerships for natural gas companies North America, the Russian Arctic and Africa.
“We are pleased to partner with affiliates of Saudi Aramco, the largest oil and gas company in the world, to advance the development of Sempra LNG’s natural gas liquefaction facility in Texas and enable the export of American natural gas to global markets,” Jeffrey Martin, chairman and CEO of Sempra Energy, said in a statement.
(Source:www.wsj.com)
According to the agreement, 5 million tons per year of LNG for the next 20 years would be sold to Aramco by Sempra. The companies however said that further negotiation and finalization of the agreement is pending.
“If converted to a sales and purchase agreement (SPA), this will be one of the largest LNG deals ever signed and the largest deal signed since 2013,” said Giles Farrer, research director at energy and minerals consultancy Wood Mackenzie.
The first phase of Sempra’s Port Arthur LNG facility in Texas, which is currently being development, would be the sources of the supplies. Aramco would also make a 25% equity investment in the facility according to the deal.
Sempra is among a number of US shale gas companies that are trying to develop US facilities to export LNG which is natural gas cooled to a liquid form for transportation and the agreement with Aramco would boost those efforts of the company. The export terminals for LNG are multi-billion dollar projects and therefore customers needed to be lined up by LNG developers for financing such projects. Analysts now expect that Sempra will green light the Port Arthur facility now that it has struck an agreement with Aramco.
Previously, an 20 year agreement to sell 2 million tons per year to the Polish Oil and Gas Company from Port Arthur was struck by Sempra. Sempra will have assured customers for about 7 million tons of the 11 million tons per year of capacity at Port Arthur after the completion of the Aramco deal.
There were reports earlier that an investment in a U.S. LNG facility was being sought to be made by Aramco. The company CEO Amin Nasser said in a press statement that Aramco has been pursuing a long-term strategy to become a leading LNG player globally which would be boosted by its arrangement with Sempra.
“With global demand for LNG expected to grow by around 4% per year, and likely to exceed 500 million metric tons a year by 2035, we see significant opportunities in this market and we will continue to pursue strategic partnerships which enable us to meet rising global demand for LNG,” the CEO said.
Aramco wants to double its total gas production to 23 billion cubic feet per day over the next 10 years and to achieve that end, the company has been contemplating partnerships for natural gas companies North America, the Russian Arctic and Africa.
“We are pleased to partner with affiliates of Saudi Aramco, the largest oil and gas company in the world, to advance the development of Sempra LNG’s natural gas liquefaction facility in Texas and enable the export of American natural gas to global markets,” Jeffrey Martin, chairman and CEO of Sempra Energy, said in a statement.
(Source:www.wsj.com)
