Unnamed Reuters Sources Say Aramco, ADNOC in US LNG Talks | OilPrice.com - OilPrice.com

Unnamed Reuters Sources Say Aramco, ADNOC in US LNG Talks | OilPrice.com
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Reuters on Wednesday cited unnamed sources as saying that giant Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) are in talks to invest in American liquefied natural gas (LNG) in a quest to compete with Qatar, which lost its ranking to the U.S. in January as the world’s largest LNG exporter.

Citing “sources aware of the matter”, Reuters said Aramco and ADNOC are attempting to broaden competition with Qatar as demand for LNG is expected to grow by 50% by 2030.

On the Aramco side, talks reportedly center around the Sempra Infrastructure Port Arthur LNG Phase 2 project in Texas. Phase 1 is already producing, and phase 2 has been proposed for expansion.

On the ADNOC side, talks are reportedly in conjunction with NextDecade’s proposed fourth processing facility at the Rio Grande LNG export operation and concerns a potential offtake agreement.

Reuters was unable to provide additional detail about the nature of the talks, or whether purchase agreements or equity stakes were being discussed.

Neither Aramco nor ADNOC have responded to Reuters requests for comment.

Reports of these unconfirmed talks come after the Biden Administration in January paused approvals for new LNG projects, and as American LNG faces difficulties in securing financing for new projects.

"The message is: If ESG focussed banks won't finance U.S. projects, someone will," Reuters cited Kaushal Ramesh, Rystad Energy's vice president for LNG research, as saying.

In early January, the U.S. overtook Qatar and the largest LNG exporter in the world, primarily due to the Russian invasion of Ukraine, which forced Europe to quickly change energy gears and intake American LNG to replace Russian gas.

The U.S. started exporting LNG in 2016. Forbes cites LSEG data as showing full-year 2023 American LNG exports had reached 88.9 million metric tons, an increase year-on-year of around 15%.

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By Charles Kennedy for Oilprice.com

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