Saudi Aramco will sign US LNG contracts during the crown prince's Washington visit, sources say

Saudi Aramco will sign two U.S. LNG supply agreements with Woodside Energy & Commonwealth LNG next week when Saudi Arabian Crown Prince Mohammed bin Salman is in Washington, according to sources with knowledge of the situation. Saudi Aramco wants to be a major player in liquefied gas, particularly in the United States where the LNG capacity will almost double within the next four-years. It has signed agreements with other U.S. companies, such as NextDecade Rio Grande LNG.

Aramco's CEO and President Amin Nasser told analysts on a conference call in August that the company aims to produce 20 million tonnes of LNG per year (mtpa), with 4.5 millions tons already in production.

Shell, the largest LNG trader in the world, sold around 66 million tonnes per annum last year.

Three industry sources have said that Aramco expects to receive LNG supplies of up to 2 million tpa at Commonwealth LNG's proposed Cameron, Louisiana facility.

Four industry sources said that Aramco is also expected to strike a deal with Woodside to buy a stake of the $17.5 billion Louisiana LNG Project and to sign an offtake contract to secure up 2 mtpa LNG supply.

Aramco refused to comment. Woodside stated that it would not comment on speculations about the market and referred back to an agreement made earlier to explore collaboration opportunities with Aramco. Commonwealth LNG has not responded to a comment request immediately.

The deal brings Commonwealth LNG closer to its goal of selling 8 mtpa of the plant’s 9.5 mtpa capacity.

Commonwealth LNG wants to build the United States’ first integrated LNG export plant. Its major shareholder Kimmeridge will sell gas to the facility from its Eagle Ford Shale production.

The company plans to take a financial decision by the end the year on the construction of the facility.

Woodside gave its final approval to the project in April. The plant will have three trains and produce 16.5 million tonnes of LNG per year. It is scheduled to begin production in 2029. (Reporting from Marwa Nasralla and Shadia Nazarella in London, Emily Chow and Curtis Williams respectively in Singapore and Houston; additional reporting provided by Maha El Dahan and Helen Clark in Perth and Dubai; editing by Susan Fenton).

(source: Reuters)