Saudi Aramco-backed LNG portfolio player MidOcean Energy said Tuesday that it will buy a 20% stake in Malaysian state player Petronas’ Canadian assets, giving it an entry point into Shell’s LNG Canada project.

Under the deal, MidOcean, held 49% by Aramco and led by US-based infrastructure investor EIG Partners, will acquire a 20% stake in both the North Montney entity that holds Petronas’ upstream assets in Canada and the venture that holds its minority stake in the 14 million ton per year LNG Canada export project in British Columbia. The deal implies a 700,000 ton/yr equity stake in LNG Canada for MidOcean — “with potential to grow” if Phase 2 of LNG Canada is advanced, MidOcean said in a statement.

“Our participation further strengthens MidOcean’s portfolio, secures meaningful LNG offtake, and reinforces our commitment to building a diversified and resilient LNG business for the decades ahead,” MidOcean Chairman Blair Thomas said in a release announcing the deal.

For its part, Petronas emphasized that the deal establishes a “strategic LNG partnership” and that it “remains committed to its investments in Canada.”

The announcement follows shipment of LNG Canada’s first volumes earlier this year and, more recently, increased momentum in the Canadian LNG export space amid greater federal support. An expansion that would double the capacity of LNG Canada was recently tagged for fast-tracking by regulators, with MidOcean noting the “potential” to grow its volumes from the second phase.

LNG Canada is owned 40% owned by Shell, 25% by Petronas, 5% by PetroChina, 15% by Japan’s Mitsubishi and 5% by Korea Gas.

Upstream Integration

Aramco’s fast-moving LNG expansion strategy has largely focused on purchasing equity interests in international projects and players, with MidOcean serving as a key investment vehicle. The venture already owns stakes in LNG projects in Peru and Australia.

But the latest transaction goes beyond LNG to offer upstream integration via Petronas’ North Montney upstream partnership that lists Sinopec and Indian Oil as partner and holds more than 800,000 gross acres of mineral rights 53 trillion cubic feet of gas reserves and contingent resources in Western Canada.

Elsewhere, Aramco directly holds a 20-year sales and purchase agreement for 1.2 million tons/yr of LNG from Train 4 of NextDecade’s Rio Grande scheme on the US Gulf Coast, which reached a positive final investment decision earlier this month. It also penned a nonbinding heads of agreement with Sempra regarding a potential 5 million ton/yr offtake agreement and 25% equity stake in Phase 2 of the Port Arthur development, also in Texas.