Saudi Arabia agrees to become major buyer of US LNG

Sempra Energy, the California based company with major LNG operations in Texas has entered into a 20-year agreement with Saudi Aramco in which the Saudis will purchase liquefied natural gas.

The deal is with Sempra’s subsidiary, Sempra LNG and will allow the Saudi state oil giant to become a major global gas player. Aramco has been developing its own gas resources and examining assets in the US, Russia, Australia and Africa.

The two companies finalized a 25 percent equity investment in the phase 1 of Port Arthur LNG.  The agreement is for 5 million tons a year of LNG from the port.

“Port Arthur LNG could be one of the largest LNG export projects in North America, with potential expansion capabilities of up to eight liquefaction trains or approximately 45 mtpa of capacity,” the statement said.

Aramco plans to boost its gas production to 23 billion standard cubic feet (scf) a day from about 14 billion scf now.