Half a billion dollars.. Aramco announces the first international investment in liquefied gas

Saudi Aramco acquired a strategic minority stake in Mid-Ocean Energy Company for $500 million, which is considered the Saudi company’s first international investment in liquefied natural gas.

Under the agreement, which is pending completion of regulatory approvals and final requirements, Saudi Aramco has the option to increase its stake and associated rights in Mid-Ocean Energy in the future, according to a statement issued by the company.

Founded and managed by EIG, Mid-Ocean is working to acquire stakes in four Australian liquefied natural gas projects. The agreement is an extension of the partnership between Saudi Aramco and EIG, which was part of a consortium to acquire a 49% stake. % in Aramco Crude Oil Supply, a subsidiary of Saudi Aramco, in 2021.

Strong growth in the sector

Saudi Aramco President and Chief Executive Officer Amin Nasser expected strong growth in demand for gas, especially with “the continued global trend towards energy transformation,” and added in the statement that gas “will be important to meet the growing global needs for safe, available, and more sustainable energy.”

For his part, Nasser Al-Naimi, head of exploration and production at Saudi Aramco, considered this deal “an important step in the company’s strategy to become a leading global player in the liquefied natural gas business.” He believed that the liquefied natural gas market “has great opportunities and is operating in a position that allows... structural growth in the long term.

Opportunities on a global scale

As for AIG Chairman and Chief Executive Officer Blair Thomas, he confirmed that the initial focus is on the deals announced in Australia, but he cautioned that there is “a range of opportunities on a global scale.”

He pointed out that "liquefied natural gas has a major role to play in enabling an orderly transition that balances society's twin goals of carbon reduction and energy security."

Chinese Jiangsu Xinghong Group

On the other hand, Saudi Aramco is looking forward to potentially acquiring a 10% strategic stake in the Chinese Jiangsu Xinghong Petrochemical Industry Group, according to a framework agreement signed between the two companies, according to a statement issued by the Saudi company.

The Chinese company owns and operates an integrated refining and petrochemical complex with a production capacity of 320 million barrels per day, and a complex for converting methanol to olefins and their derivatives. It also owns, through its wholly-owned subsidiaries, a facility for the production of purified terephthalic acid. Its facilities are located in a petrochemical industry park in Jiangsu Province.

Under the cooperation agreement, Saudi Aramco intends to supply Shenghong with crude oil and other raw materials. Saudi Aramco and Shenghong Petrochemical Company will also cooperate to implement a major expansion project, subject to the outcome of consultations between the two parties and the conclusion of binding final agreements.

Previous acquisitions

The Saudi company is working to increase its capacity to convert crude oil into chemicals, and is trying to expand in the Chinese market, which is one of the world's leading markets in the field of energy.

The deal, if completed, will not be the first of its kind. Last July, the Saudi company completed the acquisition of a 10% stake in Rongsheng Petrochemical Co. Ltd. for 24.6 billion Chinese yuan (3.4 billion US dollars) through Its wholly owned subsidiary, Aramco Overseas Company.