Saudi Aramco expands into LNG by buying stake worth $500m in MidOcean Energy

Saudi Aramco, the world’s largest oil-exporting company, has signed a $500 million agreement to buy a minority stake in liquefied natural gas (LNG) company MidOcean Energy. This is Aramco’s first investment in LNG and is part of the company’s efforts to diversify its activity beyond its core oil business. The strategic partnership enables Aramco to tap into international LNG opportunities. 

The National and other sources report that the agreement with MidOcean Energy marks Aramco’s first international investment in LNG. Aramco said the agreement included an option to increase its shareholding and associated rights in MidOcean Energy in the future.

“We anticipate strong demand-led growth for LNG as the world continues on its  energy transition, 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.” said Amin Nasser, Aramco president and chief executive.

MidOcean Energy, which is managed by energy-focused institutional investor EIG, is currently in the process of acquiring interests in four Australian LNG projects.

“We believe LNG has a key role to play in enabling an orderly transition that balances society’s twin goals of decarbonisation and energy security,” said Blair Thomas, EIG chairman and chief executive.

 Competition for LNG has increased since Russia’s invasion of Ukraine last year, with Europe importing record volumes of the supercooled fuel to replace Moscow’s gas supplies.  Global LNG trade hit a high of $450 billion in 2022 amid a surge in European demand, according to the International Energy Agency.

The Middle East is expected to spend up to $120 billion to boost natural gas production by more than 19 per cent by 2030, according to energy consultancy Wood Mackenzie.

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