U.S. LNG Projects on Radar for Aramco and ADNOC

Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) are currently engaged in negotiations aimed at potential investments in U.S. LNG projects. With forecasts projecting a 50% surge in LNG demand by 2030, these Gulf oil giants are actively exploring opportunities within the United States.

In recent times, the United States has emerged as the world's leading exporter of LNG, particularly as it achieves record-breaking export volumes to European markets.

Aramco is presently in discussions concerning the second phase of Sempra Infrastructure's Port Arthur LNG project located in Texas. This phase represents an expansion of the operational capabilities established during the initial phase. Simultaneously, ADNOC is in talks with U.S. LNG company NextDecade regarding potential offtake arrangements from a proposed fourth processing unit at the $18 billion Rio Grande LNG export facility. While NextDecade refrains from providing commentary on market speculation, Sempra Infrastructure, a subsidiary of Sempra, maintains its stance of not commenting on commercial considerations pertaining to projects in the development phase.

The United States is on a trajectory to nearly double its LNG capacity within the next four years. However, numerous financial obstacles have hindered the progress of several U.S. LNG project developers in advancing their export terminals. These challenges are primarily attributed to heightened scrutiny from investors and regulatory pressures on financial institutions to prioritize environmental, social, and governance (ESG) considerations.

Responding to growing environmental apprehensions, U.S. President Joe Biden issued a directive halting approvals for new LNG export projects in January.

Specific details regarding the nature of discussions with Saudi Aramco and ADNOC, whether they involve equity stakes or sale and purchase agreements, remain undisclosed. Aramco is potentially considering acquiring some or all of the output from one of the two liquefaction units planned for Port Arthur's second phase, each boasting a production capacity of up to 13.5 million tonnes per annum.

Aramco is actively seeking to solidify its position within the global LNG market, while ADNOC already holds a significant presence as an established player in the industry. Both entities find themselves in competition with Qatar, which stands as a dominant force in the global LNG export market.

Aramco, a global leader in integrated energy and chemicals, is dedicated to generating value across the hydrocarbon spectrum and fostering societal and economic prosperity for individuals and communities worldwide who depend on essential energy resources. We are steadfast in our commitment to spearheading the energy transition and assume responsibility in facilitating the transition to a net-zero economy. Our team is tirelessly engaged in addressing the world's sustainability concerns, striving to contribute to sustainable solutions.