Saudi Aramco has agreed to buy 5 million tonnes of liquefied natural gas per annum from US-based company Sempra over a 20-year period.
This deal follows the announcement by the subsidiaries of both firms that they have executed a non-binding Heads of Agreement for a sale and purchase deal, through which the oil giant will receive LNG from the Port Arthur LNG Phase 2 expansion project in Texas, according to a statement.
Port Arthur LNG is a natural gas liquefaction and export terminal in Southeast Texas with direct access to the Gulf of Mexico.
This move falls in line with Aramco’s 25 percent participation in the project-level equity of Phase 2.
It also aligns well with the firm’s belief that LNG can be a transition energy that could help reduce the burning of fuels such as coal and fuel oil, lessen greenhouse gas emissions, and maintain global energy security.
“We are excited to take this next step into the LNG sector. As a potential strategic partner in the Port Arthur LNG Phase 2 project, Aramco is well placed to grow its gas portfolio with the aim of meeting the world’s growing need for lower-carbon sources of energy,” Aramco Upstream President Nasir Al-Naimi said, adding that the deal is a “major step” in the company’s strategy to become a leading global LNG player.
Sempra Chairman and CEO Jeffrey Martin said the planned expansion of Port Arthur LNG would help facilitate the broad distribution of US natural gas across global energy markets.
He added: “By expanding the global reach of the Port Arthur LNG facility, we have the opportunity to improve energy security while providing a lower-carbon alternative to coal for electricity production.”
The Port Arthur LNG Phase 1 project is currently under construction and consists of trains 1 and 2, as well as two LNG storage tanks and associated facilities.
On the other hand, the Port Arthur LNG Phase 2 project is a competitively positioned expansion of the site to include the addition of up to two trains capable of producing up to 13 million tonnes per year.