(From left): MidOcean Energy CEO De la Rey Venter and Aramco upstream president Nasir K Al-Naimi signed the agreement. Credit: Saudi Aramco/ MidOcean Energy.

Aramco has signed a definitive agreement to purchase a minority stake in liquefied natural gas (LNG) company MidOcean Energy in a deal valued at $500m (SR1.8bn).

The Middle East oil and gas giant said the deal with MidOcean Energy marks its first global investment in LNG.

Based in the US, MidOcean Energy is backed and managed by energy and infrastructure investment company EIG.

As part of its expansion plans to build a diversified global LNG business, MidOcean Energy is in the process of purchasing a stake in four Australia-based LNG projects.

The deal builds on an earlier partnership between Aramco and EIG.

In 2021, a consortium, which included EIG, acquired a 49% stake in Aramco subsidiary Aramco Oil Pipelines Company.

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The latest deal also gives the Saudi oil behemoth the option to later increase its ownership stake and related rights in MidOcean Energy.

Aramco president & CEO Amin Nasser said: “We anticipate strong demand-led growth for LNG as the world continues on its energy transition journey, with gas being a vital fuel and feedstock in various industries.

“We believe that gas will be important in meeting the world’s rising need for secure, accessible and more sustainable energy.”

EIG chairman and CEO Blair Thomas said: “Energy transition informs every investment decision we make, and we believe LNG has a key role to play in enabling an orderly transition that balances society’s twin goals of decarbonisation and energy security.

“Concurrent with that, we believe the LNG industry is ripe for change and there is a role for a nimble, pure-play company like MidOcean Energy. While our initial focus is on the announced transactions in Australia, we believe the opportunity set is global. We are excited to expand our existing partnership with Aramco to include this important initiative.”

The deal completion is subject to customary closing conditions including regulatory approvals.

Earlier this week, Aramco agreed to hold talks to acquire a 10% equity stake in Shenghong Petrochemical, a Chinese company.