Saudi Arabia’s new 'freedom' gas
Saudi Arabia has partnered with a US company to export LNG from Texas, and is looking for more LNG deals.
The United States has achieved a goal of energy independence. Now, according to the Department of Energy, US policy will support the export of American energy products such as liquefied natural gas as “molecules of US freedom” to the rest of the world. But energy markets are a little more complicated, and less nationalistic.
Saudi Arabia, through its national oil company Aramco, has just made a major gas investment in the United States. America’s energy independence has a side effect; it is also attracting its competitors as foreign direct investors. It is unlikely, however, that the American freedom gas exported by Saudi Aramco will find its way to the kingdom.
Sempra Energy and Saudi Aramco announced last week that their subsidiaries have agreed to a long-term liquefied natural gas sale and purchase agreement for 5 million tons per year of LNG offtake from a Port Arthur, Texas, facility. The deal also includes Aramco taking a 25% equity stake in the Port Arthur LNG export project. Sempra Energy is a San Diego-based utility with operations in the Americas that has branched out into the energy infrastructure business as a builder and operator of supply chains and the power plants that purchase and use the energy to create electricity.
Aramco has been on a hunt to expand its operations into full-scale energy production, from upstream to downstream in oil and gas, to petrochemical production globally. Its efforts have so far been most fruitful in finding a partner in LNG in the United States, while partnerships in Russia and Asia are also targets.
