With New MOUs, Saudi Aramco Affirms Bet on US LNG Sector

Saudi Aramco’s pair of preliminary agreements this week related to potential investments in two US Gulf Coast LNG export projects reinforce the pivotal role US LNG is set to play in the Saudi state giant’s global LNG growth ambitions.

The state-run company announced Wednesday an unspecified deal — understood to be a nonbinding memorandum of understanding (MOU) — with Commonwealth LNG related to its 9.5 million ton per year (1.35 billion cubic foot per day) development in Louisiana. Aramco also announced an MOU that affirms its support for MidOcean Energy’s planned investment in — and offtake from — the planned Lake Charles LNG facility. Aramco holds a 49% stake in private equity-backed MidOcean.

The MOUs accompanied a raft of other agreements Aramco announced in conjunction with Saudi Crown Prince Mohammed bin Salman’s visit to Washington this week.

Aramco has set an ambitious goal to increase its LNG portfolio to 20 million tons/yr (2.8 Bcf/d) in the coming years, mainly by acquiring offtake and equity stakes from overseas projects while relying on domestic supplies to replace crude oil for power generation. The US, which offers flexible LNG contract terms, will play a leading role in meeting that goal; if all of Aramco’s various, mostly preliminary, agreements come to pass, the national oil company will hold stakes in and/or offtake from five US export projects.

The Saudi giant has a firm 20-year sales and purchase agreement in hand for 1.2 million tons/yr of offtake from Train 4 of the Rio Grande scheme and a heads of agreement for a 25% stake in the Port Arthur Phase 2 LNG project, also in Texas, as well as 5 million tons/yr of offtake.

Light on Details

While the latest LNG agreements were heralded as part of $270 billion worth of US-Saudi corporate deals announced this week — and a new pledge by the kingdom for $1 trillion in trade and investment with the US — details were sparse. The Commonwealth agreement, for instance, only mentioned the “potential purchase of LNG and gas,” without elaborating.

The second MOU regarding Lake Charles, meanwhile, overlays an existing heads of agreement between MidOcean and Lake Charles backer Energy Transfer under which MidOcean has agreed to cover 30% of the construction costs for the 16.5 million ton/yr (2.3 Bcf/d) project in exchange for 30% of its volumes. A final investment decision on the export project is expected in the first quarter of 2026.

Reuters reported this week that Aramco was also set to announce a deal for up to 2 million tons/yr from Woodside’s 16.5 million ton/yr Louisiana LNG plant, but Wednesday’s release did not mention the Australian gas giant or its flagship US export facility. When asked about the status of Aramco’s participation in Louisiana LNG, Woodside referred Energy Intelligence to its Capital Markets Day briefing, which stated that the company is still “targeting strategic equity partners for 20% to 30% of the project.”

If Aramco were to advance a deal with Woodside for such volumes, and pursue similar volumes from Commonwealth LNG, it would be positioned to hold over 10 million tons/yr, or 1.4 Bcf/d, of US LNG supplies, placing it among the US’ top five international offtakers.

The string of preliminary deals shows Aramco is “very interested in further building out its portfolio of energy services to its global customers, and even though it itself is not producing and exporting the LNG [from Saudi Arabia], it does want to add that arrow to its quiver,” said Clayton Seigle, an energy security senior fellow at the Washington-based Center for Strategic and International Studies. “So that does seem like a sensible win-win.”