Aramco to enter LNG Business with stake in MidOcean Energy for $500m

Energy major Aramco has sealed definitive agreements to acquire for $500m a strategic minority stake in MidOcean Energy, an LNG firm formed and managed by institutional investor EIG.

The deal which marks Aramco’s first international investment in LNG comes with an option to increase size of shareholding.

Specifically, completion of the transaction is subject to closing conditions which include regulatory approvals, whilst Aramco is having the option to increase its shareholding and associated rights in MidOcean Energy in the future.

According to Aramco, the agreement builds on the relationship between Aramco and EIG, which was part of a consortium that acquired a 49% stake in Aramco Oil Pipelines Company, a subsidiary of Aramco, in 2021.

To note, MidOcean Energy is currently in the process of acquiring interests in four Australian LNG projects, with a growth strategy to create a diversified global LNG business.

Amin H. Nasser, Aramco president and chief executive, stated: “We are pleased to be strengthening our strategic partnership with EIG through this acquisition, which marks Aramco’s first international investment in LNG. We anticipate strong demand-led growth for LNG as the world continues on its energy transition journey, with gas being a vital fuel and feedstock in various industries. We believe that gas will be important in meeting the world’s rising need for secure, accessible and more sustainable energy.”

De la Rey Venter, MidOcean Energy chief executive, noted that it is an honor for MidOcean Energy to have Aramco as a key shareholder and strategic partner.

“We share the conviction that LNG is an integral enabler of the global energy transition, and we believe that the global LNG industry has strong fundamentals for many decades to come. Synergistic partnerships are core to how MidOcean Energy will do business, grow and thrive. In Aramco, we have a partner that has long-term thinking in its DNA and an unwavering commitment to enduring collaborations.”

Blair Thomas, EIG chairman and chief executive, commented that “Energy transition informs every investment decision we make, and we believe LNG has a key role to play in enabling an orderly transition that balances society’s twin goals of decarbonization and energy security. Concurrent with that, we believe the LNG industry is ripe for change and there is a role for a nimble, pure-play company like MidOcean Energy. While our initial focus is on the announced transactions in Australia, we believe the opportunity set is global. We are excited to expand our existing partnership with Aramco to include this important initiative.”