The global Influx of the US as leader in energy sector has now reached Saudi Arabia. US has setup a deal to sell liquefied natural gas to Saudi Arabia from Sempra Energy. The move seeks to give a new strategic direction to the Kingdom, as it vows to set a benchmark in the growing market for fuel.
Aramco, Saudi Arabian Oil Co., plans to purchase gas from San-Diego-based Sempra Energy’s Port Arthur project in Texas, the companies said on Wednesday.
As stated, the two companies confirmed that their subsidiaries, Aramco Services Co. and Sempra LNG, have mutually signed “heads of agreement,” which forecasts the negotiation and finalization of a 20-year-sale-and-purchase agreement.
Under the accord, the devised plan and finalization of a 25% equity investment in Phase 1 of the Port Arthur Project has been agreed to; the two companies confirmed in a press release. However, the financial terms of the deal still couldn’t be reached, as sources with knowledge of the matter said.
Saudi Arabian Oil Co. was seen nearing a deal, after the reports of closing an accord to purchase LNG with several US producers and a Russian producer in recent months, came forward.
The deal signifies a major transition in the US energy sector, which has become one of the world’s largest exporter of oil. Ironically, for better part of history, the Kingdom has been a major supplier of oil to the US. However, with foundation and evolution of Shale, the US Energy has recorded giant net exports per year.
On the other hand, Aramco’s real intention to sign for such a deal is to boost its gas investments by millions of dollars, both domestically and internationally. Besides, the company also does not produce any oil and gas in foreign nations, because it has its own gas reserves. Though, the problem with the reserves is that they contain high amount of Sulphur, making gas expensive and hard to extract.
The practical analysis of Saudi’s move, thus, only draws out that the nation is reorienting their energy strategy and diverting it towards gas, as the world makes a transition from one fuel to the other.
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