Saudi Aramco, the world’s largest oil company with a market value of over $2trn, has made its first international investment in liquefied natural gas (LNG) signaling its ambition to diversify its energy portfolio.
The state-owned firm is buying a strategic minority stake in Washington-based MidOcean Energy, owned and managed by US investment firm EIG Partners.
The deal worth $500m includes an option to raise the size of the shareholding and marks Aramco’s entry into the global LNG market, which is projected to rise as governments seek cleaner and more secure energy sources as they transition to a low-carbon economy.
Commenting on the transaction, Amin Nasser, CEO and president of Aramco, said: “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. We believe that gas will be important in meeting the world’s rising need for secure, accessible and more sustainable energy.”
MidOcean Energy is currently in the process of acquiring interests in four Australian LNG projects, with a growth strategy to create a diversified global LNG business. The company reached an agreement with Tokyo Gas in October 2022 to buy its interests in Gorgon LNG, Ichthys LNG, Pluto LNG and Queensland Curtis LNG for 2.15bn in cash.
LNG ship orders have been placed in record volumes over the past couple of years and shipyards clearly anticipate the volume of orders to keep flooding. South Korea’s HD Hyundai Heavy Industries (HHI) has most recently been given a go-ahead by Middle Eastern LNG giant QatarEnergy to build 17 LNG carriers, one of the largest single shipyard orders in history worth nearly $4bn.
