Aramco, ADNOC discussing US LNG investments

Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) are reportedly in discussions to invest in US liquefied natural gas (LNG) projects, aiming to capitalise on their fossil fuel resources amid growing demand for LNG, Reuters reported on Wednesday.

Aramco is considering an investment in the second phase of Sempra Infrastructure’s Port Arthur LNG project in Texas, while ADNOC is in talks with US LNG firm NextDecade for an offtake from a proposed unit at its Rio Grande LNG export facility.

However, US LNG projects have faced financial challenges due to investor demands and regulatory pressures on banks to focus on environmental, social, and governance (ESG) factors.

In response to climate activism, US President Joe Biden paused approvals for new LNG export projects earlier this year. It remains unclear whether the discussions with the Gulf oil giants involve equity stakes, sale and purchase agreements, or both.