Saudi Aramco to buy stake in EIG's MidOcean Energy to tap into LNG
Sept 28 (Reuters) — Saudi Arabia’s oil giant Aramco said on Thursday it agreed to acquire a strategic minority stake in liquefied natural gas company MidOcean Energy for $500 million, with an option to increase the size of the shareholding.
MidOcean is owned and managed by U.S. investment firm EIG Partners, which led a consortium to buy a 49% stake in Aramco’s oil pipelines business in 2021, a deal that raised $12.4 billion for Aramco.
“This is an important step in Aramco’s strategy to become a leading global LNG player,” Aramco Upstream President Nasir K. al-Naimi said in a statement.
“MidOcean Energy is well-equipped to capitalise 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 is in the process of buying interests in four LNG projects in Australia as part of its growth strategy to create a global LNG business, the statement said.
In October 2022, MidOcean said it agreed with Tokyo Gas Co to buy the Japanese company’s stakes in a portfolio of four Australian LNG projects for $2.15 billion.
Sources told Reuters in July EIG was tapping international investors, particularly in the Middle East, to buy into MidOcean, which is part of a consortium taking over Australia’s Origin Energy for $10.2 billion.
Aramco President and Chief Executive Amin Nasser said the deal strengthened Aramco’s relationship with EIG and “gas will be important in meeting the world’s rising need for secure, accessible and more sustainable energy.”
(Reporting by Swati Verma in Bengaluru; Writing by Yousef Saba in Dubai; Editing by Jane Merriman and Sharon Singleton)
Related Knowledge Center: Liquefied natural gas
Driven by plentiful natural gas produced from shale plays, the United States began exporting liquefied natural gas in 2016 when the Sabine Pass terminal in Louisiana opened and shipped its first cargo. Since then, additional capacity, or trains, have been added to Sabine Pass, and terminals have become operational in Cameron Parish, La.; Hackberry, La.; Cove Point, Md.; and Corpus Christi, Texas. The Energy Information Administration projects that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world, behind Australia and Qatar. The tariff war with China has the potential to impact some final investment decisions for additional terminals in the coming months.