Saudi Arabian Oil Co. (Aramco) is acquiring a minority stake in MidOcean Energy for $500 million in a bid to tap into global liquefied natural gas (LNG) opportunities.
MidOcean Energy is an LNG company formed and managed by EIG, an institutional investor focused on the global energy and infrastructure sectors. The company, which aims to build a diversified, resilient, cost and carbon competitive LNG portfolio, is in the process of acquiring stakes in four Australian LNG projects, with a growth strategy to build a global LNG business diversified
Completion of the transaction is subject to closing conditions, including regulatory approvals. Aramco has the option to increase its stake and associated rights in MidOcean in the future, the two companies said in a joint press release on Thursday.
The deal builds on the relationship between Aramco and EIG, which was part of a consortium that acquired a 49 percent stake in Aramco Oil Pipelines Company, a subsidiary of Aramco, in 2021. The partnership with MidOcean means Aramco’s first foray into the global LNG market. .
“We are delighted to strengthen our strategic partnership with EIG through this acquisition, which marks Aramco’s first international investment in LNG,” said Aramco Chairman and CEO Amin Nasser. “We foresee strong growth driven by LNG demand as the world continues its energy transition journey, with gas as a fuel and vital raw material in a number of industries. We believe gas will be important in meeting the growing global need of safe, accessible and more sustainable energy”.
“This is an important step in Aramco’s strategy to become a world leader in LNG,” said Aramco Upstream President Nasir Al-Naimi. “We see significant opportunities in this market, which is positioned for long-term structural growth. MidOcean Energy is well-equipped to capitalize on increased demand for LNG, and this strategic partnership reflects our willingness to work with key international players to identify and unlock new opportunities globally.”
“The 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,” said Blair Thomas, president and CEO of EIG. “At the same time, we believe the LNG industry is ripe for change and there is a role for an agile and clean company like MidOcean Energy. While our initial focus is on the announced transactions in Australia, we believe the opportunity set is global. We are delighted to expand our existing partnership with Aramco to include this important initiative.”
“It is an honor for MidOcean Energy to have Aramco as a key shareholder and strategic partner,” said MidOcean CEO De la Rey Venter. “We share the belief that LNG is an integral enabler of the global energy transition and believe that the global LNG industry has strong foundations for many decades to come. Synergistic partnerships are critical to how MidOcean Energy will do business, grow and prosper. At Aramco , we have a partner that has long-term thinking in its DNA and an unwavering commitment to lasting partnerships. We look forward to pursuing many new opportunities together.”
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