Saudi Aramco boosts stake in MidOcean, fund new stake in Peru LNG

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Saudi Aramco, the world’s biggest oil producer, will increase its stake in EIG-backed liquefied natural gas (LNG) firm MidOcean Energy to 49 per cent and fund its acquisition of a new 15 per cent stake in Peru LNG from Hunt Oil Company.

The state-owned energy giant’s indirect stake in Peru LNG will equate to 17.2 per cent.

“Aramco played a pivotal role in the transaction, including undertaking key technical and commercial due diligence as well as engaging with key stakeholders for transaction approval,” MidOcean said in a statement.

The LNG firm bought an additional 15 per cent stake in Peru LNG, taking its shareholding to 35 per cent. MidOcean and Hunt will each hold a 35 per cent stake in Peru LNG when the deal closes.

Peru LNG’s assets consist of a natural gas liquefaction plant with a 4.45 mmtpa processing capacity, a 408 km pipeline with a 1,290 mmcf/d capacity, two 130,000 m3 storage tanks, and a 1.4 km marine terminal.

MidOcean said that Aramco’s investment further strengthens the two entities’ position in the global LNG market and will provide both parties with further exposure to the only LNG export project in South America. The deal further deepens Aramco’s relationship with EIG, which led a consortium that acquired a 49 per cent stake in Aramco Oil Pipelines Company for $12.4bn in 2021.

Aramco forayed into the global LNG market in September 2023 with the acquisition of a minority stake in MidOcean in a deal that is valued at $500m. The oil giant is expanding its portfolio into LNG at a time when global demand for the fuel has surged, particularly in Europe, which is replacing reduced pipeline supplies from Russia.

Aramco boost LNG portfolio

Meanwhile, Aramco seeks to strengthen its position in the LNG market, which is set to grow by 50 per cent globally by 2030, especially in the US where LNG capacity is set to almost double over the next four years.

The energy giant signed a non-binding agreement with US energy firm Sempra in June for the supply of LNG from Phase 2 of the Port Arthur project in Texas.

The heads of agreement (HoA) will see Aramco buy as much as 5 million tonnes per annum (mtpa) of LNG for 20 years. It will also make a 25 per cent equity investment in the proposed Phase 2 expansion.

Earlier in June, Aramco signed a non-binding agreement with US energy provider NextDecade for the supply of 1.2 mtpa of LNG for 20 years.

Back home, the company awarded contracts worth more than $25bn for the second phase of the expansion of its Jafurah gas field and the third phase of expanding its main gas network. The development of the Jafurah field, which is estimated to hold 200 trillion cubic feet of gas, is expected to cost $100bn and boost the state energy firm’s gas production by more than 60 per cent by 2030.

Read: Saudi Aramco, Sempra sign 20-year LNG offtake deal