Saudi Aramco Signs Long-Term LNG Supply Deal with Commonwealth LNG

Saudi Aramco has signed a long-term LNG supply agreement with U.S. developer Commonwealth LNG, a move that brings the Louisiana export project closer to final investment decision.

(Reuters) — Saudi Aramco and Commonwealth LNG have signed a long-term contract for the U.S. LNG developer to supply the world's largest oil exporter with 1 million metric tonnes per annum (MMtpy), three people familiar with the deal tell Reuters.

The deal includes an option for Saudi Aramco to double the volume to 2 MMtpy.

Saudi Aramco wants to become a major liquefied natural gas player, especially in the U.S., where LNG capacity is set to almost double over the next four years. It has already signed deals with other U.S. players including NextDecade's Rio Grande LNG project.

Commonwealth LNG and Saudi Aramco were not immediately available for comment when contacted by Reuters.

Commonwealth LNG is looking to build the country's first integrated LNG export facility in Cameron, Louisiana, with its major shareholder Kimmeridge selling gas from Eagle Ford shale production to the plant.

The deal will bring the LNG developer closer to the 8 MMtpy it wants to sell out from the proposed facility's total capacity of 9.5 MMtpy ahead of construction. The firm is targeting the end of the first quarter to make a positive final investment decision on the project.

Saudi Aramco is targeting 20 MMtpy of LNG capacity to eventually sell into the global market, with 4.5 MMtpy currently in progress, Aramco President and CEO Amin Nasser said in a call with analysts last August.