Saudi Aramco, the world’s largest oil producer, is deepening its foothold in the global liquefied natural gas (LNG) market. The company will increase its stake in MidOcean Energy to 49%, financing the acquisition of a new 15% stake in Peru LNG from Hunt Oil Company. This investment marks another significant move by Aramco to expand its portfolio in the fast-growing LNG sector.
Strategic LNG Investments
Aramco’s additional investment in MidOcean will give the Saudi energy giant an indirect 17.2% stake in Peru LNG, the only LNG export project in South America. MidOcean and Hunt Oil will each hold a 35% stake in Peru LNG when the deal closes, solidifying their control over this critical asset. Peru LNG’s facilities include a natural gas liquefaction plant with a 4.45 million tons per annum (mtpa) capacity, a 408-kilometer pipeline, storage tanks, and a marine terminal.
This move follows Aramco’s September 2023 entry into the global LNG market through a $500 million investment in MidOcean Energy. The deal further strengthens the company’s position as it seeks to capitalize on growing demand for LNG worldwide, especially in the United States, where LNG capacity is projected to nearly double in the next four years.
Strengthening Global LNG Market Position
Aramco’s increased stake in MidOcean and its new investment in Peru LNG will provide both companies with greater exposure to the global LNG market. This includes significant opportunities in regions such as the U.S., where Aramco has already signed non-binding agreements with energy firms like Sempra and NextDecade for long-term LNG supply contracts.
The energy giant has committed to buying as much as 5 million tons of LNG annually from the Port Arthur project in Texas and 1.2 million tons annually from NextDecade. These deals are part of Aramco’s broader strategy to secure a leading role in LNG as global demand rises by 50% by 2030.
Expanding LNG Portfolio
Aramco’s focus on LNG expansion goes beyond the international market. At home, the company is investing heavily in developing its Jafurah gas field, estimated to hold 200 trillion cubic feet of gas. The $100 billion project is expected to boost Aramco’s gas production by more than 60% by 2030. The company also awarded contracts worth over $25 billion to expand its main gas network and support the second phase of Jafurah’s development.
These strategic moves reinforce Aramco’s commitment to diversifying its energy portfolio, positioning itself as a key player in the global LNG market while continuing to dominate the oil and gas sectors.
