Saudi Aramco signs long-term supply agreement with Commonwealth LNG

Three people with knowledge of the deal say that 'Saudi Aramco signed a contract with Commonwealth LNG for the U.S. LNG company to supply 1 million metric tons per annum. Saudi Aramco has the option to double its volume up to 2 mtpa.

Saudi Aramco aims to be a major player in the liquefied gas industry, particularly in the United States, where capacity for LNG is expected to double within four years. It has signed agreements with other U.S. companies, including NextDecade's Rio Grande LNG Project.

Commonwealth?LNG, and Saudi Aramco did not respond to our request for comment.

Commonwealth LNG wants to build the first integrated LNG export plant in the United States at Cameron, Louisiana. Its major shareholder Kimmeridge will sell gas to the plant from the Eagle Ford shale.

The LNG developer will be closer to achieving the 8 mtpa that it wants to sell from the total facility capacity of 9.5mtpa before construction. The company is aiming to reach a final investment decision by the end of first quarter.

Saudi 'Aramco' is targeting 20 mtpa in LNG production to be sold on the global market. Currently, Aramco CEO Amin Nasser told analysts in an August call that 4.5 mtpa was in progress. Reporting by Curtis Williams and Marwa Rashed in Houston; editing by Nathan Crooks, Chizu Nomiyama and Chizu Crooks

(source: Reuters)