Global oil giant Aramco (2222) further outlined plans to expand its foothold in the liquefied natural gas (LNG) production sector during Gastech 2024, the world’s largest energy conference and exhibition.
Details
Abdulkarim Al Ghamdi, Executive Vice President of Aramco’s Gas business unit, noted that the company has set a target to become a major player in the LNG sector.
So what
Aramco, the world’s largest oil producer, has completed several acquisitions in the LNG sector, the latest being increasing its stake in “MidOcean Energy” to 49%.
Aramco will finance MidOcean’s acquisition of a new 15% stake in “Peru LNG” from “Hunt Oil.”
MidOcean explained that Aramco’s additional investment would open up more opportunities in South America’s only LNG export project.
Aramco will hold an indirect stake of 17.2% in Peru LNG once the deal is completed.
Some context
Last year, Aramco acquired a minority stake in MidOcean Energy from U.S. investment firm EIG for USD 500 million, marking its first foray into overseas LNG markets.
In June, Aramco signed a non-binding 20-year agreement with US-based NextDecade to buy and sell LNG from the latter’s “Rio Grande” LNG project in Brownsville, Texas.
This is part of Aramco’s efforts to strengthen its position in the LNG market, which is expected to grow 50% globally by 2030, especially in the U.S.
According to Reuters, global LNG capacity is expected to nearly double in the next four years.
Now what
The U.S. Federal Reserve’s decision to cut its interest rate for the “first time” since March 2020 by 50 basis points could benefit the petrochemicals sector.
The benchmark rate now ranges between 4.75% – 5%, with a potential for another similar cut by the end of 2024.
Ibrahim Alnwaibet, CEO of “Value Capital,” told Asharq Al-Awsat that the rate cut will increase oil demand, benefiting companies like Aramco, SABIC, and Yansab.
It’s worth noting that “Tadawul” will be closed next Monday in celebration of the 94th Saudi National Day.
