RIYADH: Energy giant Saudi Arabian Oil Co. is on track to enter the global liquefied natural gas market thanks to a new agreement.
The leading intergraded energy and chemicals firm has agreed to acquire a strategic minority stake in MidOcean Energy for $500 million, according to a statement.
According to Aramco Upstream President Nasir Al-Naimi, this move aligns well with the company’s goal of becoming a prominent LNG player.
“We see significant opportunities in this market, which is positioned for structural, long-term growth,” Al-Naimi said.
He added: “MidOcean Energy is well-equipped to capitalize on rising LNG demand, and this strategic partnership reflects our willingness to work with leading international players to identify and unlock new opportunities at a global level.”
MidOcean Energy is an LNG firm established and managed by the leading US-based energy sector and infrastructure investor, EIG.
The agreement cements the relationship between Aramco and EIG, which was part of a consortium that acquired a 49 percent stake in Aramco subsidiary Aramco Oil Pipelines Co. in 2021.
“We are pleased to be strengthening our strategic partnership with EIG through this acquisition, which marks Aramco’s first international investment in LNG,” said Aramco President and CEO Amin Nasser in the statement.
He added: “We anticipate strong demand-led growth for LNG as the world continues on its energy transition journey, with gas being a vital fuel and feedstock in various industries.”
Nasser spoke about how gas is crucial in meeting the world’s rising need for secure, accessible and more sustainable energy.
“Energy transition informs every investment decision we make, and we believe LNG has a key role to play in enabling an orderly transition that balances society’s twin goals of decarbonization and energy security,” said EIG Chairman and CEO Blair Thomas.
Completion of the transaction is subject to closing conditions, which include regulatory approvals.
Moreover, Aramco is also eligible to choose to raise its shareholding and associated rights in MidOcean Energy in the future.
“We share the conviction that LNG is an integral enabler of the global energy transition, and we believe that the global LNG industry has strong fundamentals for many decades to come,” said MidOcean Energy CEO De la Rey Venter.